A majority of the awarded contracts were in water, oil & gas, and real estate, which accounted for approximately 70% of the total value of contracts awarded. Healthcare, transportation, and industrial contracts accounted for 27% of the total value while 3% were awarded in the power sector. The value of awarded contracts decreased during the second quarter to SAR11 billion ($2.9 billion) after a strong showing during the first quarter. The promising start to the year fizzled during Q2 as numerous project awards were suspended due to the effects of the coronavirus pandemic. Furthermore, many of the projects that were in initial phases of execution were halted as stay at home orders, redirecting some of the government’s budget, and significant declines in the revenues of construction companies paused spending plans and initiated reorganization strategies to accommodate these drastic market changes. The brunt of the impact was expected to occur during the second quarter as the initial challenges surfaced in March, which led the government to spend approximately SAR270 billion to accommodate the private sector. Consequently, the value of awarded contracts declined by SAR54 billon ($14.4 billion) during Q2’20 compared to last year, and declined by SAR34 billion ($9.1 billion) compared to last quarter. Through H1’20, the total value of awarded contract reached SAR56.2 billion ($11 billion), a decline of SAR57.8 billion ($15.4 billion) compared to H1’19.
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