Saudi Arabia’s total value of construction contracts for the first quarter (Q1) of 2016  was recorded at SR 27.9 billion ($7.4 billion), dropping by 51% in comparison to the same period last year where the value reached SR 27.9 billion ($7.4 billion), according to a report by NCB bank.

The same report showed that Q4 2015 witnessed a 39% drop in total contract value compared to that of Q3 2015, Trade Arabia Reported.

The contracts awarded were mostly in the private sector – 47% were in oil and gas, 21% in the hospitality sector, and 16% in residential property, according to The National.

The continued decline in construction contracts is a reflection of the country’s challenging economic conditions caused by ongoing low oil price, said the report; however, this recent drop is considered the sharpest seen since 2009.

The government has cut infrastructure spending brought about by fiscal restructuring in lieu of the drop in oil revenues. The existing awarded projects are likely to be scaled down or their execution period to be extended, added the NCB report.

The Construction Contracts Index (CCI) has reached at the end of Q1 to 179 points following a rocky start the beginning of the year. This is the first time that the CCI has dropped to below 200 points since Q1 2014.

According to the report provided by NCB, the Eastern province received 51% of the total value of awards followed by the Madinah region who received 13% of the awards. The Northern region had an 11% share of the contracts attributed mainly due to shale gas development project contract by Saudi Aramco.

The capital projects and infrastructure sector across the GCC have been majorly impacted as a result of the constant low oil prices.