Riyadh – Mubasher: Colliers International said that a future balancing of the Saudi budget could moderate planned spending across the construction industry until the novel coronavirus (COVID-19) is under control and oil prices regain an upward trend towards a sustainable level.
The Saudi construction market will be negatively affected in 2020, with the number of previously forecasted projects to be awarded declining, particularly in the private sector, Colliers said in a recent report.
Materials
Some key construction materials have witnessed a slight increase in pricing between the period from the second quarter (Q2) of 2019 to Q2-20. Precautionary measures imposed to contain COVID-19 have affected productivity and logistics and impacted the global material supply chains, putting upward pressure on costs.
Inflation Outlook
“Looking forward from now to the end of 2020, the overall cost of construction for new tenders should not increase and when compared to the fourth quarter of 2019, we predict that construction costs will reduce by more than 3%, due to a diminished pipeline of work and increased competition,” the report read.
