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Saudi sees construction contracts soar in second quarter of 2011


The Saudi Arabia?s Construction Contracts Index (CCI) has shown that the Kingdom?s construction sector saw awarded contracts increase by 43 per cent increase over the second quarter of 2010.

Saudi Arabia?s CCI jumped to 205.3 points at the end of the first half of 2011, which is in stark contrast to the 80.36 points recorded in the corresponding period of 2010.

The new report by Saudi?s National Commercial Bank showed that Saudi witnessed US$9.2 billion worth of awarded contracts in the second quarter of 2011 which represents a 43 per cent increase over the second quarter of 2010 when the value of awarded deals was US$6.45 billion.

The report also showed that Dubai construction contracts awarded in Saudi Arabia during the first half of 2011 jumped 156 per cent to US$22.45 billion up from US$8.8 billion in the corresponding period last year.

?This reflects the robustness of the construction industry over the past six months in particular as the initiatives from the annual budget and King Abdullah?s royal decrees are currently being implemented,? Saeed A. Al Shaikh, group chief economist of National Commercial Bank, said.

31 per cent of the value of awarded contracts during the second quarter was directed towards infrastructure related sectors. However, the residential real estate and power sectors garnered the highest percentage of the value of awarded contracts, accounting for 26 per cent and 23 per cent, according to the report.

In terms of geographical break-down, Riyadh accounted for the highest portion of awarded contracts by value, with a 26 per cent share. The Eastern Province accounted for 25 per cent of the value of awarded contracts with a big chunk of industrial, water and urban development contracts awarded.

The Makkah and Madinah regions accounted for 16 per cent and 15 per cent, respectively. The main contract awards in those regions were residential real estate projects in Jeddah and a power contract in Yanbu.