Foreign labourers work at a construction site in the Saudi capital Riyadh on April 10, 2013. AFP PHOTO/FAYEZ NURELDINE
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Saudi Arabia's construction industry faces difficult times ahead as the prospect of state budget cuts adds to painful labor reforms, according to major builder Al-Khodari, in a sign of the strain on an economy squeezed by lower oil prices.It has been pushing companies to hire more Saudi citizens instead of cheaper foreign workers in order to move Saudis out of the state sector and into private industry.Brent crude prices have fallen to around $45 a barrel from over $115 in June last year, slashing Saudi Arabia's oil export cash – so-called petrodollars – which traditionally account for around 90 percent of its state revenues.The Saudi finance minister said in September that the government was delaying some construction projects but those deemed important for the economy would go ahead. Khodari aims to raise the share of nongovernment contracts at his firm's business to 35 percent by 2018 from 15 percent of the present backlog.His firm reported a 14.3 million riyal ($3.8 million) loss for the third quarter against a 15 million riyal profit a year earlier, its first net loss since its 2010 initial public offer.
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