The Saudi Arabian construction market was valued at around USD 37 billion in 2020 and is expected to register a CAGR of 5.2% over the forecast period, 2021–2026.
Prior to the Covid-19 outbreak, it was reported that the infrastructure and construction industry in Saudi Arabia was amongst the largest in the Gulf Cooperation Council (GCC) region, with more than USD 825 billion worth of planned and unawarded projects. The industry had seen growth in the contracts awarded – from USD 11.2 billion in 2016 to USD 14.6 billion in 2018. The total value of construction contracts awarded in Saudi Arabia during the third quarter (Q3) of 2020 collapsed by 84% on figures for the same period in 2019 as the economic impact of the COVID-19 pandemic continued to spread.
The Saudi Arabian construction market is expected to witness significant growth and offer lucrative potential, due to its Vision 2030, NTP 2020, and several ongoing reforms to diversify away from oil. The Vision 2030, NTP 2020 and private sector investment boost, and the ongoing reforms are likely to be the growth drivers for the Saudi construction market in 2018 and beyond.
Currently, the country's economy is entering a post-oil era in which the kingdom’s mega-cities, which are under construction, will provide the country’s future growth.
According to the industry sources, more than 5,200 construction projects are currently ongoing in Saudi Arabia at a value of USD 819 billion. These projects account for approximately 35% of the total value of active projects across the Gulf Cooperation Council (GCC).
Saudi Arabia’s Vision 2030, along with a significant investment in housing and infrastructure development promoted across the country by local authorities, are revitalizing the construction industry and generating interest in a growing number of international players.
The urban construction sector is the largest contributor to the construction sector expansion, with 3,727 active projects valued at USD 386.4 billion. The utility sector is the second largest contributor with 733 projects worth USD 95.6 billion, followed by transportation with 500 projects valued at USD 156.2 billion.
Some of the major urban construction projects in Saudi Arabia include the King Abdullah Security Compounds (Phase 5), and the Grand Mosque (Holy Haram Mosque expansion), each valued at USD 21.3 billion and developed by the Ministry of Municipalities and Rural Affairs in Makkah.
