The Saudi construction sector has been most affected by the suspension of economic activities during the coronavirus (Covid-19) pandemic.
However, specialists in the construction and urban development sector are expecting a strong resumption of work, which would contribute to reducing economic losses while completing pending projects, reported Saudi daily Asharq Al Awsat.
They affirmed that smoothly starting economic activities can ensure the sector’s gradual recovery and reinforce expectations for an active return to construction in Saudi Arabia to complete the implementation of 5,000 projects worth a whopping $1.6 trillion, it stated.
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, the report added.
According to the Saudi Contractors Authority, a survey conducted on 600 contracting companies in the country 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 per cent due to the pandemic, it stated.
Meanwhile, operating sources have stated that the Saudi market is expecting an active and gradual resumption of activity in the construction sector.
They pointed out that the boom in the conclusion of construction contracts in 2019 supports the restoration of this activity 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 where the value of awarded contracts is to more than double, from SR2.3 billion ($613 million) in 2019 to SR6.8 billion ($1.8 billion) this year.
He noted that the coronavirus pandemic has greatly affected the construction sector, as work was suspended in line with the precautionary measures imposed, stated Al Hammadi.
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.