Saudi Arabia continued to see a fall in the value of construction contracts in the second quarter of the year.
Awards slumped by 27 percent to SAR 20.3bn ($5.4bn) in the three months to 30 June compared to the first three months of the year, according to the latest NCB Construction Contracts Index.
The decrease was mainly attributed to the reduction in awarding of mega-projects, as a result of the fiscal restructuring by the government, the report said.
However, there was a significant increase in the number of smaller contracts that focused on strengthening the Kingdoms infrastructure capabilities.
After amounting to SAR 9.3bn in April, the value of awarded contracts in May dipped to SAR 3.1bn, which was one of the lowest levels since April 2010.
While Kingdoms largest metro projects in Jeddah, Medina, and Dammam will stall in 2016, investment in oil and gas projects is continuing, as well as in power sector, the report said.
Oil & gas accounted for SAR 6.5bn or 32 percent of the total value of awarded deals, followed by petrochemical at SAR 5.6bn (28 percent), and residential real estate at SAR 2.9bn (15 percent).
The power sector witnessed a rise in the value of awards compared to the previous quarter to reach SAR 2.4bn (12 percent).
Approximately SAR 48.2bn worth of contracts were awarded during the first half of 2016 compared to SAR 116.9bn worth of contracts awarded during the same period in 2015.
The project awards in the second half of the year and into 2017 will be dependent on the governments current plan of scaling down and prioritization of projects, NCB said.
An upward trend in oil prices will ease the situation, but since this is an unlikely scenario, further decline in contract awards appear to be the most likely outcome.