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ANALYSIS
Contract outlook
Value of awarded contracts in KSA reaches $6.9bn in Q2 2021
SAUDI ARABIA
US – Saudi Business Council report says that sector’s Q2 performance marks the third consecutive quarter of growth after the pandemic
T
he total value of awarded contracts during Q2’21 climbed to $6.9 billion, according to a report by the US – Saudi Business Council, marking three consecutive quarters of growth after pandemic induced slowdowns caused values to bottom out during the third quarter of 2020. The value of awarded contracts grew by 34% QoQ and by 134% YoY.
USSBC’S CONTRACT AWARDS INDEX PERFORMANCE THROUGH Q2 2021 The USSBC Contract Awards Index (CAI) climbed to 101.74 points to end the second quarter. The gradual rebound in the CAI is attributed to an uptick in awarded contracts during H1’21 following delays in awarding and executing numerous mega-projects in 2020. The CAI grew by 9.44 points QoQ as it elevated above the 100-point threshold following two consecutive quarters of contraction. BREAKDOWN OF AWARDED CONTRACTS ACROSS TOP PERFORMING SECTORS Power: The power sector witnessed 13 contracts during Q2’21 as it maintained its lead from last quarter as the highest awarded sector. The power sector grew by $642 million or 46% QoQ and by a substantial$1.9 billion or 207% YoY. This marks the highest value of awarded contracts in the power sector since the fourth quarter of 2015, when
November 2021 | MEConstructionNews.com
it tallied $3 billion. Impressively, the power sector’s $3.4 billion in H1’21 surpassed the total value of awarded contracts in all of 2020, which reached $2.2 billion. The power sector in H1’21 grew by $2.6 billion or 77% YoY. Petrochemicals: The petrochemicals sector had no contracts awarded last quarter but surged to the second highest ranking during Q2’21 with $1.2 billion on only three contracts. The petrochemicals sector had no awarded contracts during the same period last year but did have sizeable contracts that were awarded in the first quarter prior to the pandemic. For H1’21, the value of awarded contracts in the petrochemicals sector was $1.1 billion or 48% lower YoY. Water: The water sector had five contracts that were awarded during Q2’21 that were valued at $878 million. The value of awarded contracts grew by $305 million or 53% QoQ but declined by $272 million or 24% YoY. Through
Growth in the Kingdom Saudi Arabia has marked three consecutive quarters of growth after pandemicinduced slowdowns.
Fragile footing KSA’s construction sector is still on fragile footing as it faces a number of headwinds despite the improvements seen.
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Number of power sector contracts awarded in Q2 2021
