The construction sector, one of the largest contributors to the Kingdom’s non-hydrocarbon GDP, grew by around 5.7% year-on-year in Q3, although down from 6.5% in Q2 2013 but higher than the 4.9% growth in Q3 of 2012, the study said. The sector also recorded the highest growth among GDP sectors, with the rate being nearly double the overall 3% growth in GDP.
“Slower growth in the construction sector compared with the previous quarter may reflect the combined effect of the recent changes and enforcement of labor market regulations, as well as slower construction activity during the summer months,” Jadwa said, referring to the recent departure expat workers from the Kingdom under a government crackdown. “We, however, expect the impact of changes and enforcement of labor market regulations to be temporary, as the sector adjusts to this new norm. On the upside, the construction sector will continue to benefit from vast activity in building infrastructure, commercial and residential projects.”
A breakdown of Q3 results also revealed that manufacturing, mining and quarrying including oil recorded the second highest year-on-year growth rate of 3.6% each.
Citing government data, the report posted a 3.3% growth rate in the private sector, 3.2% in transport and communication, 3.1% in electricity, gas and water, 2.8% in personal services, 2.7% in trade and 2.3% in government services.