Infrastructure work in Saudi Arabia records strongest growth in July: Survey

Infrastructure registered the strongest growth among the three major construction segments in Saudi Arabia in July, supported by government-backed transportation and utilities projects, Alrajhi Capital said in a survey.

The latest rise in infrastructure work was the steepest since the survey began in January.

The headline seasonally adjusted Saudi Construction Index declined marginally to 55.2 from 56.3 in June, but remained well above the 50.0 no-change threshold.

Residential building expanded at a strong pace last month, marking three months of continuous growth. Many companies noted robust demand for urban residential projects and an improvement in broader market conditions.

Non-residential structures activity, however, lost some momentum, but the rate of growth was still the second-fastest since February.

New orders in the residential category expanded at a strong pace, with the latest upturn the highest since January.

Around 48 percent of the survey panel predicted a rise in business activity over the year ahead, while only 4 percent forecast a decline. This pointed to the highest level of optimism since the survey began in January.

Business confidence strengthened to its highest level since the survey began, supported by easing geopolitical tensions, a recovery in new contracts and increasing public-private partnership opportunities, said Sultan Altowaim, Head of Research at Alrajhi Capital.

“These factors continue to provide a positive backdrop for Saudi Arabia’s construction sector,” he stated.

The index is compiled from responses to questionnaires sent to a panel of around 200 construction companies.