It is no gain without pain for Saudi Arabia’s projects sector. With oil prices expected to stay in the $40-60 a barrel range for the foreseeable future the general outlook is a subdued one as the kingdom looks to manage its budget deficit by cutting costs, issuing bonds and introducing fiscal reform.

The impact is already being felt by the projects sector as the cost cutting measures start to bite. Major decisions on projects have been delayed until next year, and although some key awards are still being made - notably the award of the Duba power plant, the majority will stall until 2016.

The slowdown in awards is a concern for the projects sector because while new awards are not made, projects are being completed as planned. According to regional projects tracker MEED Projects, of the $258bn of projects that are currently at the execution stage,$30bn are due to be completed this year, and more alarmingly, another $96bn are scheduled to be completed in 2016.

With $126bn of work finishing by the end of next year, contractors will be searching for new opportunities. Based on the experience of 2015, many will be left disappointed. This year there have been $41bn of contracts awarded in Saudi Arabia, and if a similar performance is registered in 2016, then there will be negative growth for the projects market.

Once prospective decline in activity has been digested the outlook for the longer term is more optimistic. As economic reforms start to take hold, the pressure to cut back on spending will subside, and if oil prices start to strengthen at the same time then the newly slimmed down Saudi construction sector can start to enjoy the good times again.