RIYADH – In the first quarter of 2024, the value of awarded contracts reached an impressive SAR118.8 billion ($31.7 billion).
The development continued the strong momentum seen in 2023, which concluded with SAR270.6 billion ($72.2 billion) in awarded contracts.
It represents a 79 percent year-over-year increase and is the second-highest quarterly value recorded since Q3 2015, when it reached SAR147.1 billion ($39.2 billion).
On a quarter-over-quarter basis, the value of awarded contracts jumped by 35 percent from SAR56.5 billion ($15.1 billion) in Q4 2023.
The surge occurred despite a 1.7 percent decline in the Kingdom’s GDP during Q1 2024 due to continued oil production cuts.
The non-oil economy, however, grew by a solid 3.1 percent, with the private sector contributing significantly with a 3.4 percent increase. The construction sector’s GDP also grew by 2.4 percent.
Major drivers of this growth included the oil & gas sector, spearheaded by Saudi Aramco, and Vision 2030 mega-projects such as Neom and the Red Sea development.
The SAR118.8 billion ($31.7 billion) in awarded contracts were predominantly led by the oil & gas, real estate, and water sectors, which together accounted for 84 percent of the total value.
Specifically, the oil & gas sector made up 43 percent of the total contracts.
The real estate sector saw substantial contracts across hospitality, residential, mixed-use, and commercial areas.
Other sectors that received large project awards included industrial, urban development and transportation.
Sector Breakdown: Q1 2024
The oil & gas sector led all others in Q1 2024, recording its highest value of awarded contracts in a single quarter. The sector accumulated SAR51.2 billion ($13.7 billion), representing 43 percent of the total.
Key projects included the Jafurah Unconventional Gas Plant, the Master Gas System Expansion, and pipeline expansion work.
European, Indian, and Chinese contractors were the primary recipients of these project awards, while local contractors took on smaller projects.
The real estate sector continued to be a major contributor to the growth of awarded contracts, securing SAR24.4 billion ($6.5 billion), or 21 percent of the total.
In 2023, the sector attracted SAR83.5 billion ($22.3 billion) in contract awards, the second highest on record.
Within the real estate sector, residential projects attracted SAR3.2 billion ($853 million), hospitality projects garnered SAR4.8 billion ($1.3 billion), mixed-use projects received SAR1.4 billion ($371 million), and commercial real estate captured the largest share with SAR15 billion ($4 billion).
The water sector registered the third-highest value of awarded contracts, with SAR24 billion ($6.4 billion), or 20 percent of the total.
