A Saudi government agency reported that the local contracting market in the country is witnessing a slowdown in the current period due to pressure factors that have caused the sector to decline in business, with low oil prices and the consequences of the emerging Corona virus.
The Saudi Contractors Association clarified that a survey conducted by 600 contracting companies in the Kingdom revealed challenges facing Saudi contractors, which are cash flow, project delays, and supply chain disruptions, noting in a report issued recently that it expected project award to decrease by 20% during the year Current due to the pandemic.
The report pointed out that the most common challenges among Saudi contractors stand out in the cash flow with 90% of the sample choices, while 86% indicated the challenge of delaying projects, while 70% of the participants identified a crisis that interrupts the supply chain.
And the factor of oil prices was a fundamental reason for diminishing demand for construction, as the report shows that at a time when Saudi Arabia confirmed its estimates of a fiscal deficit of 22% of GDP, with oil prices declining from estimates of $ 60 to levels of $ 30 a barrel, which leads to the imposition A 20% reduction in government spending, which is clearly reflected in the contraction of project work.
About half of the contractors surveyed by the Saudi Commission for Contractors were able to benefit from government support that the Kingdom provided to the sector with the outbreak of the epidemic.