Report Overview

The Saudi Government’s increasingly large investments in the mega infrastructure development projects and rapid urbanization and industrialization across the Kingdom are expected to boost the growth of Saudi Arabia Construction Market during the forecast period between 2024 and 2030.

Saudi Arabia Construction Market - Industry Trends & Forecast Report, 2030

The Saudi Arabia Construction Market size was estimated to be worth USD 70.67 billion in 2023. During the forecast period between 2024 and 2030, the Saudi Arabia Construction Market size is projected to grow at a CAGR of 5.19%, reaching a value of USD 96.21 billion by 2030. Major growth factors for the Saudi Arabia Construction Market include favorable government investments and policies, including the Kingdom's Vision 2030 National Development Program, and rising demand for residential complexes with increasing housing demand. In addition, the rising integration of automated solutions in the construction industry is anticipated to drive the Saudi Arabia construction market during the forecast period.

Construction – Overview

Construction includes building new buildings, roads, residences, railroads, and other structures, as well as renovating or repairing existing ones. It also involves several procedures like planning, financing, and developing the assets so that they are used. The construction industry, which is vital to the economic growth of a region, laid the technological and physical foundations for modern civilization. Also, the rise in eco-awareness is hastening the creation of energy-efficient, net-zero structures. Aerial lifts, backhoe loaders, cranes, excavators, and welders are just a few of the various tools and equipment used in the construction industry.

Saudi Arabia Construction Market

Growth Drivers

Rising Adoption of Automation in Construction Industry

The companies involved in the construction sector in Saudi Arabia are increasingly investing in integrating new and innovative technologies to boost their market share. Robots can install drywall, pave roads, lay bricks, excavate to certain depths, and handle plumbing, and therefore, are gaining significant traction in the market. Other technologies, such as construction machinery like excavators, cranes, and bulldozers that can be controlled and monitored remotely through automation, are being deployed in construction activities to improve efficiency, reduce cost, and attain sustainability.  

Challenges

Regulatory Complexity in Saudi Arabia

The complex regulations in the construction sector of Saudi Arabia are a challenge to navigate through, which hinders foreign investment in the sector. For instance, with Arabic as the predominant language, international investors are required to create legal documents and communicate through the Arabic language. As a result, they need to hire and employ translators and legal experts proficient in both languages. Furthermore, Sharia law governs the commercial activities in the country, under which international companies are required to perform. Such regulations may act as a huge restraining factor for Saudi Arabia construction market growth.

Impact of Escalating Geopolitical Tensions on Saudi Arabia Construction Market

Intensifying geopolitical tensions hinder the growth of the Saudi Arabia Construction Market. For instance, escalating geopolitical tensions in Israel and across the Middle East region have resulted in the disruptions of international shipping and supply chains of construction materials in Saudi Arabia as well. The hindrance to commercial shipping in the Red Sea and Gulf of Aden caused a significant spike in the cost of construction materials due to increased shipping costs which have disrupted the overall growth of the Saudi Arabia Construction Market.

Saudi Arabia Construction Market

Segmental Coverage

Saudi Arabia Construction Market – By Sector

Based on sector, the Saudi Arabia Construction Market is segmented into commercial construction, residential construction, industrial construction, energy & utilities construction, institutional construction, and others. The commercial construction sector holds the largest share in the Saudi Arabia Construction Market. The Saudi Government is significantly investing in propelling the tourism sector by constructing commercial spaces such as entertainment facilities, airports, ports, recreational complexes, and education facilities. Saudi Arabia is also witnessing substantial growth in its service sector, which is anticipated to boost demand for offices, driving commercial construction market growth.

Saudi Arabia Construction Market – By Construction Type

On the basis of construction type, the Saudi Arabia Construction Market is segmented into building & construction, new, renovation, and repair & maintenance. The building & construction segment accounts for the highest market share. The growth of the segment is mainly attributed to the increasing construction of residential and non-residential buildings. The increasing housing demand in the Kingdom owing to rising population and accessibility to housing loans is directly influencing the building and construction of residential buildings, which is propelling its market growth.

Saudi Arabia Construction Market – By End User

By end user, the Saudi Arabia Construction Market is segmented into public and private. The public sector dominates the Saudi Arabia Construction Market. According to the International Trade Administration, the Public Investment Fund, Saudi Arabia’s sovereign wealth fund, plays a crucial role in investing and driving the construction sector of the Kingdom. Public investment has supported various construction projects, including the ambitious NEOM city project. The government is also focused on promoting the tourism sector through the construction of tourism projects, such as Red Sea Coast and Qiddiya, which is driving overall market growth.

Competitive Landscape

Major players operating in the Saudi Arabia Construction Market include Bechtel, Fluor Corp., Tekfen Construction and Installation Co. Inc., Gilbane Building Co., Jacobs, Afras, BEC Arabia, Mofarreh M. Al Harbi Est, Nesma Holding Co. Ltd, and AL Jazirah Engineers & Consultants.

To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In May 2024 – WakeCap, an IoT-based enterprise solution provider for construction sites, formed a partnership with EarthCam, a construction camera solution provider, to offer construction solutions in Saudi Arabia.

Scope of the Report

By Sector

• Commercial Construction

• Residential Construction

• Industrial Construction

• Energy & Utilities Construction

• Institutional Construction

• Others

By Construction Type

• Building & Construction

• New

• Renovation

• Repair & Maintenance

By End User

• Public

• Private