Saudi construction contracts crash 77% in 2025 as oil revenues fall

Posted on June 15, 2025   |  

Saudi Arabia's construction industry is facing a major slowdown, with a 77% drop in large infrastructure contract value during the first five months of 2025—down to SAR 36 billion ($9.6 billion) from SAR 154 billion in the same period last year.

Contracts awarded by Public Investment Fund (PIF)-backed companies fell even more sharply, down 84%, indicating a broader national spending shift.

The downturn follows a late 2024 directive to cut project budgets by at least 20%, though no formal announcement of widespread cuts has been made.

The main driver behind the slowdown is the drop in oil prices, from $82 to around $65 per barrel, which has reduced government and PIF revenues.

Saudi Aramco slashed dividends by $40 billion, affecting state and PIF funding pipelines.

Despite the cuts, the Vision 2030 goals remain intact, with Finance Minister Al-Jadaan signaling that counter-cyclical investment will be made if needed.

Large infrastructure contracts hit a two-year low in May 2025, at just SAR 1.7 billion, though real estate activity remains stable.

Optimism continues, driven by foreign investor interest and the foundation laid by previous years of high activity.