|
Forecast
Period
|
2024-2028
|
|
Market
Size (2022)
|
USD
1,01,038.7 Million
|
|
CAGR
(2023-2028)
|
8.70%
|
|
Fastest
Growing Segment
|
Residential
|
|
Largest
Market
|
Riyadh
|
Market Overview
Saudi Arabia Construction
Market has valued
at USD 1,01,038.7 Million in 2022 and is anticipated to project
robust growth in the forecast period with a CAGR of 8.70% through 2028. The Saudi Arabia Construction Market is
experiencing a transformative phase fueled by ambitious national initiatives
and a commitment to economic diversification. Aligned with the Vision 2030
agenda, the construction sector plays a central role in reshaping the country's
infrastructure, urban landscapes, and economic foundations. Mega-projects such
as NEOM, Qiddiya, and the Riyadh Metro illustrate the nation's dedication to
technological innovation and sustainable urban development. Vision 2030's
emphasis on reducing dependence on oil is driving a surge in construction
activities, including smart cities, entertainment complexes, and modern
transportation systems. Despite facing challenges such as regulatory
complexities and a need for skilled labor, the market is evolving rapidly,
driven by technological advancements, sustainability trends, and a focus on
global partnerships. The Saudi construction industry's embrace of digital
technologies, modular construction, and sustainability practices reflects a forward-looking
approach. Public-Private Partnerships (PPPs) and privatization initiatives
further signify a strategic shift, promoting private sector participation in
infrastructure development. As Saudi Arabia continues its journey toward a more
diversified and technologically advanced economy, the construction market
stands as a key catalyst, shaping the nation's future through innovation,
collaboration, and the realization of visionary projects.
Key Market Drivers
Vision 2030 and Economic Diversification
A paramount driver shaping the Saudi
Arabia Construction Market is the ambitious Vision 2030 initiative. Announced
by Crown Prince Mohammed bin Salman, Vision 2030 is a comprehensive plan aimed
at transforming the Saudi economy, reducing its dependence on oil, and
fostering a more diversified and sustainable future. This visionary initiative
has a profound impact on the construction sector, driving unprecedented growth
and development across various segments.
Vision 2030 places a significant
emphasis on infrastructure development, urban planning, and the creation of new
economic sectors. The plan envisions the construction of mega-projects, smart
cities, and modern infrastructure to propel Saudi Arabia into a globally
competitive and technologically advanced nation. As a result, the construction
market experiences a surge in demand for residential, commercial, and
industrial projects that align with the goals of economic diversification.
The development of economic cities, such
as NEOM and Qiddiya, is a testament to Vision 2030's influence on the
construction sector. NEOM aims to become a leading hub for innovation and
technology, while Qiddiya focuses on creating an entertainment and leisure
destination. These projects, along with others under Vision 2030, catalyze the
construction market, driving innovation, job creation, and economic prosperity.
The construction market, therefore, acts
as a crucial facilitator in realizing the goals outlined in Vision 2030. The
demand for skilled labor, advanced construction technologies, and sustainable
building practices has surged, positioning the industry as a linchpin in the
transformation of Saudi Arabia's economic landscape.
Urbanization and Population Growth
Rapid urbanization and population growth
represent a major driver fueling the Saudi Arabia Construction Market. The
country has been experiencing significant demographic shifts, with a growing
and increasingly urbanized population. As more people migrate to urban centers,
the demand for residential, commercial, and infrastructure projects escalates,
driving construction activities across the nation.
Urbanization is particularly pronounced
in major cities like Riyadh, Jeddah, and Dammam, where the concentration of
economic activities and job opportunities attracts a substantial influx of
residents. To accommodate this urban migration, the construction market is
tasked with developing modern residential complexes, mixed-use developments,
and supporting infrastructure.
The demand for housing, in particular,
has become a pressing concern as urbanization intensifies. The construction
market responds with the development of residential projects that align with
contemporary living standards and address the diverse housing needs of the
population. From high-rise apartment buildings to suburban housing
developments, the industry plays a pivotal role in shaping the urban landscape
to meet the demands of a growing population.
Moreover, urbanization triggers the need
for advanced infrastructure, including transportation networks, utilities, and
public amenities. The construction market is instrumental in building and
upgrading these essential components of urban life, ensuring that cities remain
functional, connected, and sustainable in the face of rapid demographic
changes.
In essence, the interplay between
urbanization and population growth serves as a driving force behind the ongoing
expansion and diversification of the Saudi Arabia Construction Market. The
industry acts as a vital engine for building the modern urban environments that
accommodate the evolving needs of the population and contribute to the overall
development of the nation.
Mega-Projects and Infrastructure
Development
The Saudi Arabia Construction Market is
significantly driven by the undertaking of mega-projects and extensive
infrastructure development initiatives. These projects, characterized by their
scale, complexity, and strategic importance, play a pivotal role in shaping the
nation's economic landscape and creating new avenues for growth.
One of the standout mega-projects is
NEOM, a futuristic city planned in the northwest of Saudi Arabia. Envisioned as
a hub for innovation, technology, and sustainability, NEOM requires extensive
construction activities, including the development of smart infrastructure,
residential zones, and cutting-edge facilities. This mega-project is emblematic
of the broader trend in Saudi Arabia to invest in transformative developments
that position the country as a global leader in various sectors.
Another notable initiative is the Riyadh
Metro project, one of the largest urban transit projects in the world. The
construction market is at the forefront of building this comprehensive metro
system, which not only enhances transportation within the capital but also
stimulates economic activities by connecting key areas and promoting
accessibility.
Additionally, the Red Sea Project and
Qiddiya are mega-projects focused on tourism and entertainment. Qiddiya, for
example, aims to become the world's largest entertainment city, featuring theme
parks, sports facilities, and cultural attractions. The construction market's
involvement in these projects goes beyond traditional infrastructure to include
the creation of unique and iconic structures that contribute to Saudi Arabia's
vision of becoming a global tourism destination.
Infrastructure development extends
beyond mega-projects to include investments in roads, bridges, airports, and
utilities. The construction market responds to the need for modern and
efficient infrastructure by employing advanced construction techniques,
sustainable practices, and innovative design solutions.
Overall, the emphasis on mega-projects
and infrastructure development serves as a driving force propelling the Saudi
Arabia Construction Market. These initiatives not only create immediate
opportunities for the construction industry but also lay the foundation for
long-term economic growth and competitiveness on the global stage.
Technological Advancements and
Innovation
Technological advancements and
innovation represent a crucial driver influencing the trajectory of the Saudi
Arabia Construction Market. The industry has witnessed a paradigm shift with
the adoption of cutting-edge technologies, transforming traditional construction
practices and enhancing efficiency, safety, and sustainability.
Building Information Modeling (BIM) has
emerged as a transformative technology, enabling 3D modeling and simulation of
construction projects. BIM enhances collaboration among stakeholders, improves
decision-making, and streamlines the construction process. Its integration into
construction projects has become increasingly common, driving the demand for
skilled professionals and technologies that support BIM implementation.
Advanced construction materials and
methods are also contributing to the market's evolution. The use of
prefabrication and modular construction techniques accelerates project
timelines, reduces waste, and enhances cost-efficiency. Innovations in sustainable
building materials, such as recycled and eco-friendly options, align with
global sustainability goals and influence construction practices in the
Kingdom.
The implementation of robotics and
automation in construction processes is another noteworthy trend. Drones, for
example, are utilized for surveying, mapping, and monitoring construction
sites, providing real-time data and enhancing project management. Automated
construction equipment and machinery improve precision and safety, contributing
to overall project efficiency.
Moreover, the integration of smart
technologies into buildings and infrastructure is transforming the construction
landscape. Smart buildings with energy-efficient systems, integrated sensors,
and automated controls are becoming increasingly common. This trend aligns with
the broader goal of creating smart cities that leverage technology to enhance
quality of life, resource management, and overall urban functionality.
The construction market's adaptation to
these technological advancements not only improves project outcomes but also
positions Saudi Arabia as a global leader in construction innovation. The
demand for skilled professionals in fields such as digital construction,
robotics, and data analytics underscores the industry's commitment to embracing
the latest technologies for sustainable and efficient construction practices.
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Key Market Challenges
Regulatory Complexity and Administrative
Hurdles
The Saudi Arabia Construction Market
grapples with the challenge of navigating a complex regulatory landscape and
administrative hurdles. While the government's Vision 2030 initiative has paved
the way for transformative growth, the implementation of regulatory changes and
administrative processes presents challenges for construction stakeholders.
One significant issue is the need for
clarity and consistency in regulatory frameworks. Construction projects often
involve multiple regulatory bodies overseeing different aspects, including
zoning, environmental compliance, and safety standards. The complexity of
navigating these regulations can lead to delays and uncertainties, impacting
project timelines and budgets.
Furthermore, administrative processes
related to permits, approvals, and licensing can be time-consuming. The
bureaucratic hurdles involved in obtaining necessary documentation contribute
to project delays, hindering the industry's ability to respond swiftly to
market demands. Streamlining these processes and ensuring greater transparency
would contribute to a more agile and efficient construction ecosystem.
The challenge extends to the need for a
standardized regulatory environment across various municipalities and regions
in Saudi Arabia. Harmonizing regulations would provide a more predictable
framework for construction companies, enabling them to plan and execute
projects with greater certainty.
Addressing these regulatory complexities
and administrative challenges requires concerted efforts by the government to
streamline processes, enhance transparency, and establish standardized
regulations. As the construction market continues to evolve, a more efficient
regulatory environment will be critical for fostering a business-friendly
atmosphere and unlocking the sector's full potential.
Skilled Labor Shortages and Workforce
Development
A pressing challenge facing the Saudi
Arabia Construction Market is the shortage of skilled labor and the need for
comprehensive workforce development. Despite significant investments in
mega-projects and infrastructure development, the industry faces a scarcity of
qualified professionals and skilled workers, impacting project execution and
timelines.
The demand for skilled labor in
construction spans various disciplines, including architects, engineers,
project managers, and skilled tradespeople. However, the education and training
infrastructure must be strengthened to meet these demands. The shortage of
skilled workers not only leads to delays but also affects the quality of
construction projects, potentially compromising safety and compliance with
international standards.
Workforce development encompasses not
only technical skills but also a focus on emerging technologies. The
construction industry is evolving with the integration of digital technologies,
Building Information Modeling (BIM), and sustainable practices. Therefore, a
workforce equipped with the knowledge and skills to adapt to these changes is
crucial for the industry's growth and competitiveness.
The challenge extends to attracting and
retaining top talent. Many skilled professionals may prefer opportunities in
other sectors or countries, posing a retention challenge for the construction
industry in Saudi Arabia. Addressing this requires strategic initiatives to
promote the construction sector as an attractive career choice, coupled with
efforts to enhance training programs and vocational education.
Collaboration between educational
institutions, industry stakeholders, and government bodies is key to overcoming
this challenge. Establishing robust training programs, fostering partnerships
with international institutions, and implementing strategies to retain skilled
workers will be instrumental in addressing the workforce shortage and
positioning the construction industry for sustained growth.
Cost Escalation and Budget Constraints
Cost escalation and budget constraints
pose significant challenges to the Saudi Arabia Construction Market. While the
industry experiences robust demand driven by mega-projects and infrastructure
development, managing project costs effectively remains a critical concern.
One of the contributing factors to cost
escalation is the dependence on imported materials and equipment. Fluctuations
in global commodity prices and currency exchange rates can lead to
unpredictable cost variations, impacting project budgets. Additionally,
logistics and transportation costs for importing materials contribute to
overall project expenses.
Budget constraints are further
exacerbated by the increasing complexity and scale of mega-projects.
Large-scale developments, such as NEOM and Qiddiya, require substantial
investments, and the risk of exceeding initial budget estimates is inherent in
such ambitious endeavors. The challenge lies in striking a balance between the
scope of projects and available financial resources.
The impact of unexpected events, such as
the COVID-19 pandemic, underscores the vulnerability of construction projects
to external shocks. Disruptions in the supply chain, labor shortages, and
project delays resulting from unforeseen circumstances contribute to cost
overruns.
Addressing these challenges requires a
proactive approach to risk management, strategic procurement practices, and the
development of contingency plans. Construction stakeholders need to collaborate
closely with financial institutions, suppliers, and project partners to
mitigate the impact of cost escalation and navigate budget constraints
effectively.
Additionally, fostering a competitive
and transparent bidding process can contribute to controlling costs.
Encouraging innovation in construction methods and materials, along with
leveraging technology to enhance project efficiency, are essential strategies
for managing costs and ensuring the financial viability of construction
projects in Saudi Arabia.
Sustainability and Environmental
Considerations
The Saudi Arabia Construction Market
faces a growing imperative to prioritize sustainability and address
environmental considerations. As the industry experiences rapid growth and
development, there is an increasing awareness of the environmental impact of
construction activities, necessitating a shift toward more sustainable
practices.
One of the significant challenges is the
environmental footprint of construction projects, including energy consumption,
waste generation, and carbon emissions. Large-scale developments, while
contributing to economic growth, can have adverse effects on the environment if
not managed sustainably. Balancing the need for development with environmental
conservation requires innovative solutions and a commitment to green
construction practices.
Water scarcity is a particularly
critical environmental challenge in the region, and construction projects often
require significant water resources. Implementing water-efficient practices,
utilizing recycled water, and exploring alternative water sources are essential
components of sustainable construction in the arid Saudi Arabian landscape.
The construction industry must also
grapple with the incorporation of sustainable materials and green building
standards. Designing and constructing buildings that meet or exceed
international sustainability certifications, such as LEED (Leadership in Energy
and Environmental Design), is becoming increasingly important. However, the
adoption of these standards may present initial cost challenges, requiring a
shift in mindset and a long-term perspective toward the benefits of
sustainability.
Regulatory frameworks and industry
standards related to sustainability are evolving, and construction companies
need to stay abreast of these changes to remain compliant. Government
incentives and penalties related to environmental performance can also influence
the industry's approach to sustainability.
Addressing these challenges requires a
holistic approach that considers the entire lifecycle of construction projects.
From design and material selection to construction methods and waste
management, sustainability considerations must be integrated into every phase
of a project. Industry collaboration, research and development of sustainable
technologies, and a commitment to environmental stewardship are essential for
overcoming the challenges associated with sustainability in the Saudi Arabia
Construction Market.
Infrastructure Resilience and Climate
Change Adaptation
Infrastructure resilience and climate
change adaptation pose significant challenges to the Saudi Arabia Construction
Market. The region is vulnerable to various climate-related risks, including
extreme temperatures, sea-level rise, and desertification, which can impact the
durability and functionality of infrastructure projects.
Extreme heat in the region can affect
the performance of materials and structures, necessitating specialized
construction techniques and materials that can withstand high temperatures.
Additionally, the potential for increased frequency and intensity of extreme
weather events, such as floods and storms, poses risks to infrastructure
resilience.
The construction industry must adapt to
the changing climate by implementing measures to enhance the resilience of
buildings, roads, and utilities. This includes incorporating climate-responsive
design principles, such as improved insulation, water management systems, and
the use of materials that can withstand harsh climatic conditions.
Sea-level rise is a specific concern for
coastal infrastructure projects. Mega-projects like NEOM, situated near the Red
Sea, need to consider the potential impact of rising sea levels on coastal
developments.
Key Market Trends
Mega-Projects Driving Transformation
One of the defining trends in the Saudi
Arabia Construction Market is the proliferation of mega-projects that are
redefining the nation's landscape. These transformative initiatives, often
aligned with the Vision 2030 agenda, represent a strategic effort to diversify
the economy and position Saudi Arabia as a global economic and technological
hub.
Projects such as NEOM, Qiddiya, and the
Red Sea Project are at the forefront of this trend. NEOM, a $500 billion
futuristic city, aims to be a global center for innovation and sustainable
living. Qiddiya, a colossal entertainment city, is designed to become a global
entertainment hub, while the Red Sea Project focuses on luxury tourism and
environmental conservation along the Red Sea coastline.
These mega-projects go beyond
conventional infrastructure development; they embody a vision of a future Saudi
Arabia that is technologically advanced, environmentally sustainable, and
economically diversified. The construction market is a key player in realizing
these ambitions, tasked with building smart cities, iconic structures, and
cutting-edge facilities that redefine the boundaries of what is possible in
urban development.
The trend of mega-projects not only
propels the construction market forward but also acts as a catalyst for
innovation, attracting international expertise and investment. It signifies a
departure from traditional construction practices, emphasizing sustainability,
smart technologies, and collaborative approaches. As Saudi Arabia continues to
invest in these mega-projects, the construction market is positioned as a
critical driver of economic transformation and global competitiveness.
Digital Transformation and Building
Information Modeling (BIM)
The Saudi Arabia Construction Market is
undergoing a significant digital transformation, with the adoption of advanced
technologies such as Building Information Modeling (BIM) at its core. BIM is
revolutionizing the way construction projects are planned, designed, and
executed, leading to increased efficiency, reduced costs, and improved
collaboration among stakeholders.
BIM enables a comprehensive and
collaborative digital representation of a construction project, integrating 3D
modeling, data analytics, and project management. This technology allows for
better visualization, coordination, and communication throughout the project
lifecycle. From initial design to construction and facility management, BIM
enhances decision-making processes and minimizes errors, contributing to the
overall success of construction projects.
The adoption of digital tools goes
beyond BIM, encompassing technologies like drones for site surveying, virtual
reality for immersive project visualization, and artificial intelligence for
data analysis. These technologies collectively form a digital ecosystem that
enhances the construction industry's capabilities, fostering innovation and
improved project outcomes.
The Saudi government's commitment to
digitalization is evident in initiatives such as the National Transformation
Program (NTP) and the Saudi Vision 2030 agenda, which emphasize the importance
of leveraging technology to enhance productivity across all sectors, including
construction. As a result, the construction market in Saudi Arabia is
experiencing a paradigm shift toward a more connected, data-driven, and
digitally enabled future.
The trend of digital transformation is
not only about adopting new tools but also involves upskilling the workforce to
harness the full potential of these technologies. Training programs,
collaborations with tech providers, and the development of digital standards
are essential components of this trend, ensuring that the construction industry
is well-equipped for the challenges and opportunities presented by the digital
era.
Sustainability and Green Building
Practices
Sustainability has become a prevailing
trend in the Saudi Arabia Construction Market as environmental consciousness
and responsible building practices take center stage. The nation's commitment
to reducing its carbon footprint and addressing environmental challenges aligns
with global sustainability goals, shaping the way construction projects are
conceived, designed, and executed.
Green building practices, including the
use of sustainable materials, energy-efficient designs, and environmentally
friendly construction methods, are becoming standard considerations in the
industry. Internationally recognized certifications such as Leadership in
Energy and Environmental Design (LEED) are gaining prominence, guiding the
construction market toward the adoption of sustainable standards.
One key driver of this trend is the
realization that sustainable construction not only benefits the environment but
also offers economic advantages. Energy-efficient buildings, for instance,
result in lower operational costs over time. As a result, developers and
investors are increasingly prioritizing sustainable construction practices as a
strategic choice for long-term economic viability.
Government initiatives, including the
Saudi Green Building Code, reinforce the trend toward sustainability. This code
sets out guidelines for sustainable construction practices and encourages the
use of renewable energy sources. Compliance with such codes is becoming a norm,
signaling a shift toward a more environmentally conscious and responsible
construction industry.
Moreover, the trend of sustainability
extends beyond individual buildings to encompass entire eco-friendly
developments. The focus on creating sustainable cities, such as NEOM, reflects
a holistic approach to urban planning that integrates green spaces, renewable
energy sources, and environmentally sensitive designs.
The construction market in Saudi Arabia
is responding to this trend by embracing innovative construction materials,
energy-efficient technologies, and sustainable construction methodologies.
Collaboration between stakeholders, including government bodies, developers,
and construction companies, is essential for the successful implementation of
sustainable practices across the industry.
As sustainability continues to gain
prominence globally, the Saudi Arabia Construction Market is well-positioned to
lead the way in integrating environmentally friendly practices into its
projects, contributing to a more resilient and sustainable built environment.
Modular Construction and Prefabrication
Modular construction and prefabrication
are emerging as transformative trends in the Saudi Arabia Construction Market,
offering efficiency, cost-effectiveness, and sustainability benefits. The
traditional methods of construction are being complemented and, in some cases,
replaced by off-site manufacturing and modular building practices.
Modular construction involves the
production of building components in a controlled factory environment, with
these components then transported to the construction site for assembly. This
approach offers several advantages, including faster construction timelines,
reduced material waste, and enhanced quality control. Additionally, modular
construction aligns with sustainability goals by minimizing the environmental
impact associated with traditional construction methods.
In Saudi Arabia, where there is a demand
for rapid urbanization and large-scale infrastructure projects, modular
construction provides a solution to accelerate the pace of development. The
construction industry is increasingly exploring this trend, especially for
projects such as housing complexes, hotels, and educational institutions.
Prefabrication, another key aspect of
this trend, involves the assembly of building elements off-site before being
transported and installed on the construction site. This approach streamlines
construction processes, minimizes disruptions to local communities, and
contributes to overall project efficiency.
The trend toward modular construction is
gaining momentum due to its potential to address challenges such as skilled
labor shortages and cost overruns. By relying on standardized components
manufactured in controlled environments, modular construction reduces reliance
on on-site labor for intricate tasks, offering a solution to the skilled labor
scarcity.
Government initiatives supporting
affordable housing, such as the Sakani program, are particularly conducive to
the adoption of modular construction. The efficiency and cost-effectiveness of
this approach align with the goals of providing quality housing at an
accelerated pace.
While modular construction and
prefabrication are not new concepts globally, their increased adoption in the
Saudi Arabia Construction Market reflects a shift in industry practices. As
more stakeholders recognize the benefits of these methods, the trend is likely
to influence a wide range of construction projects, contributing to the
industry's evolution and efficiency.
Public-Private Partnerships (PPPs) and
Privatization
Public-Private Partnerships (PPPs) and
privatization initiatives are reshaping the Saudi Arabia Construction Market,
offering new avenues for investment, project development, and infrastructure
management. The government's commitment to diversifying the economy and
encouraging private sector participation has led to a surge in PPPs and
privatization across various sectors.
One notable example is the privatization
of airports and other transportation infrastructure. The King Abdulaziz
International Airport in Jeddah and the King Khaled International Airport in
Riyadh are among the key airports that have undergone or are planned for
privatization. This trend extends to other infrastructure assets, including
seaports, utilities, and social infrastructure projects.
PPPs involve collaboration between
public entities and private companies to design, finance, build, and operate
infrastructure projects. These partnerships leverage the strengths of both
sectors, allowing the private sector to bring expertise, innovation, and
funding to projects, while the public sector retains oversight and benefits
from the efficient delivery and operation of critical infrastructure.
Privatization initiatives, including the
sale of certain government assets and the introduction of private management
for public services, create investment opportunities for private entities. The
construction market plays a pivotal role in PPPs and privatization, as it is
instrumental in delivering the infrastructure projects identified for private
sector involvement.
The Saudi government's National
Transformation Program and Vision 2030 agenda outline a comprehensive strategy
for increasing private sector participation in various industries, including
construction and infrastructure development. This strategic shift reflects a
broader trend toward creating a more diversified and dynamic economy, with the
construction market acting as a key facilitator of this transformation.
The trend toward PPPs and privatization
brings numerous benefits, including accelerated project delivery, increased
efficiency, and access to private sector innovation and funding. However,
successful implementation requires a robust regulatory framework, transparent
procurement processes, and effective risk-sharing mechanisms to ensure the
interests of both public and private stakeholders are safeguarded.
Segmental Insights
Sector
Insights
Commercial sector held around 30.95% of
the market share in 2022. The commercial real estate sector in Saudi Arabia is
poised for robust growth driven by urbanization, economic diversification
initiatives, and public-private partnerships. Commercial construction dominates
the Saudi Arabia construction market due to several factors that align with the
economic and developmental landscape of the country. The Kingdom of Saudi Arabia
has been experiencing rapid urbanization and economic diversification, leading
to a surge in commercial construction projects that cater to the growing
business and trade sectors.
One of the primary drivers is the
ambitious economic vision outlined in Saudi Arabia's Vision 2030, which aims to
reduce the country's dependence on oil revenue and foster a more diversified
and dynamic economy. This vision has led to an increased focus on developing
non-oil sectors, such as tourism, entertainment, and technology. As a result,
there is a substantial demand for commercial infrastructure, including office
spaces, retail complexes, and mixed-use developments, to support the expansion
of these industries.
The commercial sector in Saudi Arabia is
also propelled by the influx of foreign investments and the government's
efforts to create a more business-friendly environment. Initiatives like the
creation of economic cities, free zones, and regulatory reforms have attracted
local and international businesses, leading to a rising need for modern and
efficient commercial spaces.
Moreover, the growing population and
urbanization in Saudi Arabia contribute to the demand for commercial
facilities, including shopping malls, hotels, and business centers. The rise in
consumer spending and lifestyle changes further stimulate the development of
commercial spaces to meet the evolving needs of the population.
Infrastructure projects such as the
Riyadh Metro and various transport hubs are integral components of the
commercial dominance in the construction sector. These projects not only
enhance connectivity but also drive the development of commercial areas around
transportation nodes, creating thriving business districts.
The commitment to hosting global events,
like the upcoming Expo 2030, plays a pivotal role in the dominance of
commercial construction. Such events necessitate the creation of world-class
venues, hotels, and exhibition centers, contributing to the significant share
of commercial projects in the overall construction market.
Construction
Type Insights
New Construction segment dominated the
Saudi Arabia Construction Market and it accounted for a market share of 81.36%
in 2022. New construction dominates the Saudi Arabia construction market due to
a confluence of economic, demographic, and developmental factors that
underscore the nation's commitment to modernization and growth. The Kingdom of
Saudi Arabia has been undergoing rapid urbanization and industrialization,
driving the demand for new construction projects across various sectors.
One key driver is the ambitious Saudi
Vision 2030, which outlines the country's strategic goals for economic
diversification and development. This vision emphasizes the need for new
infrastructure, including residential, commercial, and industrial projects, to
support a more diversified and dynamic economy. As a result, there is a
concerted effort to build new cities, housing complexes, and industrial zones
to accommodate the evolving needs of the population and stimulate economic
activities.
The growing population, coupled with
demographic shifts and urban migration, fuels the demand for new residential
construction. Urban centers are expanding to accommodate the influx of people,
leading to the construction of modern residential complexes, housing
developments, and infrastructure to meet the needs of a rapidly growing
population.
Economic development and the promotion
of non-oil sectors, such as tourism and entertainment, contribute to the
dominance of new construction in the market. The establishment of mega-projects
like NEOM and the Red Sea Project requires extensive new construction to create
cutting-edge resorts, entertainment hubs, and tourism infrastructure.
The government's focus on improving and
expanding transportation networks is another factor driving new construction.
Mega-projects like the Riyadh Metro and the development of new airports demand
substantial construction efforts, contributing to the dominance of new
infrastructure projects in the overall construction market.
Additionally, the emphasis on
sustainability and smart city initiatives further propels new construction
projects. The integration of advanced technologies and sustainable practices in
urban planning and construction aligns with the goals of creating modern and
environmentally conscious cities.
The dominance of new construction is
also fueled by the need to replace or upgrade existing infrastructure to meet
contemporary standards. This includes the construction of modern healthcare
facilities, educational institutions, and civic amenities that contribute to
the overall well-being of the population.
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Regional Insights
Riyadh dominated the Saudi Arabia
Construction Market and accounted for a market share of 24.48% in 2022. Riyadh,
the capital city of Saudi Arabia, dominates the construction market in the
country for several compelling reasons that stem from its pivotal role in
economic, political, and demographic dynamics. As the largest city in Saudi
Arabia and a key player in the region, Riyadh has been the focal point of
ambitious development projects and urbanization initiatives, making it a
primary driver of the construction sector.
One key factor contributing to Riyadh's
dominance is its status as the political and administrative center of the
country. The Saudi government's commitment to infrastructure development is
prominently manifested in Riyadh through initiatives like Vision 2030. The city
serves as a nucleus for strategic projects and large-scale urban planning
efforts, reflecting the government's vision for economic diversification and
modernization.
The economic significance of Riyadh
further solidifies its dominance in the construction market. The city hosts a
significant portion of the nation's economic activities, including major
businesses, financial institutions, and commercial enterprises. The demand for
new commercial and residential spaces in Riyadh is consistently high, driven by
a growing population, urban migration, and the influx of both domestic and
international investments.
Riyadh's prominence is also evident in
its role as a cultural and entertainment hub. The city's commitment to
fostering cultural events, exhibitions, and entertainment initiatives, aligned
with Vision 2030, fuels the demand for construction projects related to venues,
entertainment complexes, and tourism infrastructure.
The city's strategic location and
connectivity contribute to its dominance in construction. Riyadh is a central
transportation hub with major road networks, airports, and the ambitious Riyadh
Metro project, making it a critical focal point for infrastructure development.
The Riyadh Metro, in particular, is one of the largest urban transit projects
globally, highlighting the city's commitment to sustainable and modern
transportation solutions.
Moreover, Riyadh's real estate market,
characterized by the construction of modern residential complexes, commercial
spaces, and mixed-use developments, reflects the city's appeal as a dynamic and
vibrant urban center. The drive to create smart and sustainable urban
environments further positions Riyadh as a trendsetter in construction
practices.
Recent Developments
- January 2023: China Harbor announced in
a statement that it awarded two contracts to Saudi Arabia. The first contract
was related to building the infrastructure of a new project in Riyadh, and the
main scope of work included various pipeline facilities, earthworks, and
ancillary housing construction facilities. This project was the second pipeline
network project won by the company in the central region of Saudi Arabia in
Riyadh, and it was also another important achievement of the company's active "secondary
operation" for core owners.
- December 2022: Bechtel was appointed as
the project management consultant for TROJENA, a year-round mountain
destination in the NEOM region of northwest Saudi Arabia. TROJENA is a key
development that will contribute to the Kingdom's Vision 2030 goals of growing
tourism and diversifying its economy away from hydrocarbons. In this role,
Bechtel is expected to provide various services, including technical,
commercial, and construction management, for the development of TROJENA and
support NEOM's ambitions for sustainability.
Key Market Players
- Kabbani
Construction Group
- Almabani General Contractors
- AlKifah
Contracting Company
- Nesma
& Partners Contracting Company Ltd.
- AL-AYUNI
Company
- Construction
& Planning Co. Ltd.
- Contracting
& Construction Enterprises Ltd.
- Binladen
Group Global Holding Company
- Al-Rashid
Trading & Contracting Co.
- Umm
Al Qura For Development & Construction Company
|
By
Application
|
By End-User
|
By Construction Type
|
By Region
|
- Commercial
- Corporate Offices
- Hospitality
- Healthcare &
Medical Facilities
- Educational
Institutions
- Others
- Industrial
- Oil & Gas
- Chemical & Petrochemical
- Food &
Beverage
- Pharmaceutical
- Others
- Infrastructure
- Government
Buildings
- Cultural and
Entertainment Venues
- Transportation
Hubs
- Others
- Residential
- Apartments
- Villas
- Traditional Houses
- Others
|
|
- New Construction
- Renovation
- Repair & Maintenance
|
- Riyadh
- Makkah
- Madinah
- Dammam
- Jeddah
- Tabuk
- Eastern
Province
|
Report Scope:
In this report, the Saudi
Arabia Construction Market has been segmented into the following
categories, in addition to the industry trends which have also been detailed
below:
- Saudi Arabia Construction Market, By Sector:
o Commercial
§ Corporate Offices
§ Hospitality
§ Healthcare & Medical Facilities
§ Educational Institutions
§ Others
o Industrial
§ Oil & Gas
§ Chemical & Petrochemical
§ Food & Beverage
§ Pharmaceutical
§ Others
o Infrastructure
§ Government Buildings
§ Cultural and Entertainment Venues
§ Transportation Hubs
§ Others
o Residential
§ Apartments
§ Villas
§ Traditional Houses
§ Others
- Saudi Arabia Construction Market, By End-User:
o Private
o Public
- Saudi Arabia Construction Market, By Construction Type:
o New Construction
o Renovation
o Repair & Maintenance
- Saudi Arabia Construction Market, By Region:
o Riyadh
o Makkah
o Madinah
o Dammam
o Jeddah
o Tabuk
o Eastern Province
Competitive Landscape
Company Profiles: Detailed analysis of the major companies present in the Saudi
Arabia Construction Market.
Available Customizations:
Saudi Arabia Construction Market report with
the given market data, Tech Sci Research offers customizations according to a
company's specific needs. The following customization options are available for
the report:
Company Information
- Detailed analysis and profiling of additional
market players (up to five).
Saudi Arabia
Construction Market is an upcoming report to be released soon. If you wish an
early delivery of this report or want to confirm the date of release, please
contact us at [email protected]