KSA construction sector expected to grow 6.4% this year
Real GDP growth of Saudi Arabia’s construction sector is expected to expand 6.4% this year on the back of increased government investments, following a growth rate of 1.5% and 4.7% in 2008 and 2009 respectively
Real GDP growth of Saudi Arabia’s construction sector is expected to expand 6.4% this year on the back of increased government investments, following a growth rate of 1.5% and 4.7% in 2008 and 2009 respectively, National Commercial Bank (NCB) said in a special report last month.
The sector’s share in the kingdom’s non-oil GDP fell marginally in 2008, but it is forecast to reach an all-time high of 10.41% by the end of this year, the report said.
Bank lending to the Saudi construction sector rose 7.8% in the first quarter of this year, a clear sign that confidence in the sector is returning, reported Gulf News Daily.
Lending to the sector had dried up as banks felt overexposed after five years of heavy lending . Bank credit to the sector fell by 17.7% to 44.7 billion riyals ($11.9 billion) in 2009 as the economic crisis brought with it declines in private investment, a shrinking of bank credit, and a number of project cancellations. The kingdom has 687 current projects, 22% of which are in the execution phase.
According to NCB, contracts awarded in 2010 and 2011 are forecast to reach $64 billion and $86 billion respectively.
