Construction in Saudi Arabia

We provide comprehensive support to construction companies looking to enter Saudi Arabia's construction market, offering strategic guidance, market research, and expert advisory services to ensure successful market entry and growth.

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/ Introduction

Welcome to the Saudi Arabian construction sector, a robust and continually expanding space offering substantial opportunity for enterprises and investors.

Over 1 million people (approximately 7% of the Saudi workforce) are employed in this dynamic sector that is expected to grow at an average of 5% CAGR over the next five years.

Renowned for its ambitious infrastructure projects and unwavering dedication to economic development, Saudi Arabia has witnessed significant growth within the construction industry. As of 2023, this sector contributed approximately 7.2% to the nation’s Gross Domestic Product (GDP), underscoring its pivotal role in the country’s economic landscape. The pipeline boasts projects valued at over $1.7 trillion, including high-profile ventures like NEOM and the Red Sea Project, positioning the Saudi construction industry for enduring growth and innovation.

The Saudi Arabian construction industry is propelled by several key themes that are integral to the Kingdom’s Vision 2030 initiative. Vision 2030 seeks to diversify the economy, reduce dependency on oil revenues, and foster sustainable development. A cornerstone of Vision 2030 is urban development, with a focus on creating vibrant and sustainable cities. This includes the development of mega-cities, like NEOM, designed to be global economic and technological hubs.

Sustainable construction practices, driven by environmental considerations and resource efficiency, are another core theme, reflecting Saudi Arabia’s commitment to a greener future. Additionally, technological advancement and innovation play a pivotal role in enhancing efficiency and competitiveness within the construction sector.

Moreover, the Public Investment Fund (PIF) has played a significant role in driving investment within the construction industry. PIF has strategically invested in various construction companies and building materials firms, further contributing to the sector’s growth and development. Driven by extensive government leadership, capturing opportunities in Saudi Arabia construction has become a hotbed for private sector participation – currently, around 80% of projects are financed by private investors.

Trends in the Saudi Arabian Construction Market

Focus on Sustainability

The Saudi Green Building Council (SGBC) has developed the LEED Saudi certification program; as of 2022, there were over 1,000 LEED-registered projects in Saudi Arabia.

The Saudi government aims to achieve a 30% reduction in energy intensity by 2030 and generate 50% of its electricity from renewable sources by 2040.

Growth of Modular and Prefabricated Construction

The government is promoting prefabrication to accelerate construction projects and reduce costs; KSA is expected to be a key contributor to the sector’s 226 Bn USD market size in 2026.

In 2021, SBCA announced the establishment of a prefabrication hub in Riyadh producing over 2 million m² annually.