Construction and manufacturing to remain key beneficiaries of growth
Saudi Arabia’s GDP growth is expected to rise by three percent in real terms, driven by a vibrant non-oil sector that will offset the decline in oil production. Growth in the non-oil sector will remain above the seven percent threshold in 2013, according to a report by National Commercial bank (NCB).
The Kingdom’s real nonoil GDP in 2012 grew by around 7.2 percent, which is higher than the 10-year average of 4.7 percent. This was largely driven by the high performance of the nonoil private sector. Main private sector growth was in construction, manufacturing, and the retail, with 10.3 percent, 8.3 percent and 8.3 percent annual growth, respectively.
Private sector growth emanated from royal decrees, enhanced business confidence, and improved financing. Strengthening of domestic demand is reflected in a rise in private-sector credit and the double-digit growth of merchandise imports.
Construction and manufacturing will remain key beneficiaries in 2013, growing at 10.5 percent and 8.5 percent, respectively. The bank said projections for the two sectors are supported by buoyant activity in the projects’ market and strong business confidence.
During 2012, the NCB report said value of awarded construction contracts remained above the $53bn threshold, registering $62mn, although short of the historical record of $70mn in 2011.