Saudi Arabia’s government went on an infrastructure spending spree and $6.5 billion in contracts were handed out in the construction sector during Q2, 175 per cent higher than Q1’s awarded contracts
Saudi’s National Commercial Bank (NCB) stated that both private and government sources were part of the boost and that this rising trend is expected to maintain momentum through the balance of this year.
The power sector and residential real estate market were the main driving forces behind the climb, with contracts totally $3.1 billion and $1.6 billion respectively.
NCB reported that in recent times there has been significantly more construction projects awarded due to government-stated priorities and the initiative of the private sector.
The push of these two sources has helped many different sizable projects get moving, confirming intentions to improve the nation’s infrastructure. The work also means that production in sectors supporting construction will increase.
On the whole, the Kingdom’s construction industry is projected to see a 6.4 per cent growth, which translates to a total of 10.4 per cent of the nation’s GDP.
NCB figures stated that $17.1 billion would be pumped into the local economy this year through the construction sector.
Saudi’s non-hydrocarbon industry is projected to rise only 4.4 per cent in 2010, meaning growth in the construction sector will surpass that rate.
In Saudi Arabia there are 2.51 million employed in construction, which equals 40.4 per cent of the nation’s workforce, a figure that has risen 1.5 per cent over last year.
NCB reported that this rise in labor demand for the industry is due to the increase in project implementation and volume of available work.
Estimates regarding the 2009 investments made into the construction industry pegged the sector’s workforce to grow by 4 per cent and hit 2.62 million employed. This recent rise means this segment’s share of Saudi’s total workforce remains the same.
In 2009 there was $55.2 billion in construction deals awarded and in 2008 that number was $29.6 billion.
Projects scheduled to be handed out in the last half of the year include the design and first phase building of the Jizan Refinery for Saudi Aramco, thought to value $6.9 billion, and construction of the Wasit onshore gas development program for Saudi Aramco, expected to value $6 billion.Andrew Reid, Staff Writer, Gulf Jobs Market News