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Saudi Arabia’s Construction Sector Strongest in the World

Saudi Arabia is witnessing constant growth of construction activity, supported by giant projects. (Photo: AFP)
Saudi Arabia is witnessing constant growth of construction activity, supported by giant projects. (Photo: AFP)
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Saudi Arabia’s Construction Sector Strongest in the World

Saudi Arabia is witnessing constant growth of construction activity, supported by giant projects. (Photo: AFP)
Saudi Arabia is witnessing constant growth of construction activity, supported by giant projects. (Photo: AFP)

The latest Global Construction Monitor, issued by the Royal Institution of Chartered Surveyors (RICS), revealed that the Construction Activity Index in Saudi Arabia showed the strongest results in the world.

The monitor is a quarterly guide to the trends in the construction and infrastructure markets.

The index in the Kingdom recorded a 69 percent reading in the third quarter of 2023, up from 63 percent in the previous quarter.

The data points to the continued exceptional impact of mega projects in Saudi Arabia, which fuels much of the positive climate for the sector.

However, some factors limit further growth, with increasing demand for highly trained labor, as well as high-quality requirements for construction materials.

Looking ahead, the 12-month outlook for private and non-residential housing remains very positive for the entire Middle East region, according to the report.

In this context, Saudi Arabia is achieving the strongest results in global comparison. New commercial demand continues to rise in the third quarter, with the latest net rate of 28 percent constituting a new record.

The Kingdom registered an exceptional result of 80 percent in terms of total demand, which is among the largest increases in new commercial orders in the world.

Meanwhile, seven percent of respondents in a survey that covered all regions of Saudi Arabia indicated an increase in the number of employees in the construction sector during the third quarter of 2023, compared to the constant reading of minus one percent in the second quarter.

Based on these results, Saudi Arabia remains the strongest construction market in the world, which is not surprising, according to the report, given the record impact of its mega projects.

But in order to reach new heights, the industry will need to overcome growing skills and labor shortages, as well as increases in material costs caused by overwhelming demand. Despite these challenges, the report confirms that continuous investment in projects enhances resilience, and the construction sector in the Kingdom appears ready to maintain its position as a global leader in the foreseeable future.

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Business

Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices were little changed on Thursday as investors weighed firm winter fuel demand expectations against large US fuel inventories and macroeconomic concerns.

Brent crude futures were down 3 cents at $76.13 a barrel by 1003 GMT. US West Texas Intermediate crude futures dipped 10 cents to $73.22.

Both benchmarks fell more than 1% on Wednesday as a stronger dollar and a bigger than expected rise in US fuel stockpiles pressured prices.

"The oil market is still grappling with opposite forces - seasonal demand to support the bulls and macro data that supports a stronger US dollar in the medium term ... that can put a ceiling to prevent the bulls from advancing further," said OANDA senior market analyst Kelvin Wong.

JPMorgan analysts expect oil demand for January to expand by 1.4 million barrels per day (bpd) year on year to 101.4 million bpd, primarily driven by increased use of heating fuels in the Northern Hemisphere.

"Global oil demand is expected to remain strong throughout January, fuelled by colder than normal winter conditions that are boosting heating fuel consumption, as well as an earlier onset of travel activities in China for the Lunar New Year holidays," the analysts said.

The market structure in Brent futures is also indicating that traders are becoming more concerned about supply tightening at the same time demand is increasing.

The premium of the front-month Brent contract over the six-month contract reached its widest since August on Wednesday. A widening of this backwardation, when futures for prompt delivery are higher than for later delivery, typically indicates that supply is declining or demand is increasing.

Nevertheless, official Energy Information Administration (EIA) data showed rising gasoline and distillates stockpiles in the United States last week.

The dollar strengthened further on Thursday, underpinned by rising Treasury yields ahead of US President-elect Donald Trump's entrance into the White House on Jan. 20.

Looking ahead, WTI crude oil is expected to oscillate within a range of $67.55 to $77.95 into February as the market awaits more clarity on Trump's administration policies and fresh fiscal stimulus measures out of China, OANDA's Wong said.