The construction sector in Saudi Arabia has been the most affected by the suspension of economic activities during the coronavirus pandemic.
However, specialists in the construction and urban development sector have expected a strong resumption of work; which would contribute to reducing economic losses while completing pending projects.
They affirmed that smoothly starting economic activities can ensure the sector’s gradual recovery and reinforce expectations. This is for an active return to construction in Saudi Arabia to complete the implementation of 5,000 projects worth $1.6tn.
These hopes come in light of the challenges facing the sector due to the coronavirus crisis; which has cast a shadow over Saudi contracting activity.
According to the Saudi Contractors Authority; a survey conducted on 600 contracting companies in Saudi Arabia has revealed the challenges facing Saudi contractors; mainly in cash flow, project delays, and supply chain disruptions.
It pointed to an expected decrease in awarded projects this year by 20 percent due to the pandemic.
Meanwhile, operating sources have stated that the Saudi market is expecting an active and gradual resumption of activity in the construction sector.
Construction contracts boom
They pointed out that the boom in the conclusion of construction contracts in 2019 supports the restoration of this activity. This is to complete the commitment to implementation during 2020, which would record growth during Q1 2021.
Fahad bin Mohammed Al Hammadi, former chairman of the Federation of Arab Contractors; expected early 2021 to experience a maximum flow of mega projects in the Kingdom.
He cited the Red Sea Development Project after raising the value of its awarding contracts to more than double in 2020; to increase from SAR2.3bn ($613mn) in 2019 to SAR6.8bn ($1.8bn) in 2020.
He noted that the coronavirus pandemic has greatly affected the construction sector; as work was suspended in line with the precautionary measures imposed.
Another challenge was low oil prices, he stressed; adding that spending in the construction sector during 2020 was negatively affected by the pressure posed on the oil sector since the virus’s outbreak.
Fadl al-Buainain, a financial and banking analyst; said that the construction sector was one of the most affected by the Kingdom’s suspension of economic activity.
He expressed hope that activities would resume strongly and contribute to reducing losses, gaining profits, and gradual recovery.