Our latest Saudi Arabia Construction Report 2024 provides the most recent economic and market data and predicts the short- and long-term effects of trends on the construction sector.
As 2024 approaches, the market is still strong. The scope and quantity of projects that Vision 2030 is announcing around the Kingdom guarantee a robust pipeline of building work for the foreseeable future. The future looks promising, especially in light of the 2030 Expo announcement and Saudi Arabia's lone candidacy for the 2034 World Cup.
Overall, this report will serve as a valuable resource for construction companies in Saudi Arabia and investors who are looking for a way to expand in Saudi Arabia.
Saudi Arabia’s economic growth is still strong and inflation has dropped by 1.7%. While the construction mega projects in KSA have expanded, which suggests the need for labor and materials is now being met. The price of commodities will continue to be impacted as long as OPEC reduces production and the crises in Ukraine raise consumer demand for gas and oil. Pre-concept and feasibility work now makes up the majority of the work being advanced, and substantial contracts and a consistent flow of contract executions are anticipated in the short to medium term. The Ministry of Finance has forecasted a real GDP growth rate of 4% in 2024.
In December 2023, the KSA State Budget 2024 was announced. There will be a US$21.06 billion shortfall as a result of projected revenue of US$310 billion and expenses of US$330 billion. The objective of budget 2024, according to KSA Crown Prince Mohammad bin Salman, is to boost the growth of the non-oil economy by increasing spending and investments in regional infrastructure, services, and industry. The KSA's Vision 2030 emphasizes the strategic goal of the nation to change its primary industries, particularly the non-oil sector, and contribute to the GDP of the Kingdom, which has been taken into consideration when planning the budget.
The figure below demonstrates KSA’s economic data and projections for 2024.
Saudi Arabia's involvement in potential initiatives such as NEOM, the Red Sea, ROSHN, and Qiddiya is evidence of its dedication to mega infrastructure development. Significant changes are being made to the Kingdom's terrain as a result of these strategic construction projects in KSA. By prioritizing technological advancement and sustainability in construction techniques, the initiatives seek to transcend beyond unorthodox construction undertakings.
Saudi Arabia is a significant industrial services hub. The economy of the nation has been gradually expanding, and the government has made notable efforts to encourage the expansion of the construction companies in Saudi Arabia and the industrial services sector. It provides a multitude of chances in fields including engineering, maintenance, construction, logistics, and consulting services. According to estimates, the Saudi Arabian industrial services market was worth USD 39 billion in 2019 and is projected to grow at a compound annual growth rate of 5.1% to reach USD 54 billion by 2026.
KSA is among the GCC countries where the innovations and trends seen in the global construction business have an impact on the building sector. Saudi Arabia has demonstrated a strong desire to embrace green and sustainable building principles. It emphasizes utilizing energy-efficient designs and environmentally friendly materials without sacrificing the caliber of construction. KSA aims to transform the construction companies in Saudi Arabia, which is essential to expanding the nation's economy, by adhering to the most recent trends in the industry.
By implementing sustainable methods, the construction Industry in KSA is actively contributing to environmental conservation. Saudi Arabia takes environmental sustainability seriously because it is consistent with their Vision 2030, which prioritizes sustainability and a reduction in the country's reliance on oil. KSA has 1,851 registered LEED projects as of October 30, 2023, of which 1,168 have received recognition for their energy and environmental efficiency. Interestingly, 663 projects have achieved Silver certification, compared to 45 projects that have obtained basic LEED certification. In a similar vein, 216 projects have received Platinum accreditation, while 244 have received Gold certification.
By 2024, health spending in Saudi Arabia is projected to account for 5.76% of GDP. This report provides a brief overview of Saudi Arabia's regulatory framework for the registration of medical devices and pharmaceuticals. In the healthcare sector, KSA’s top priorities are to enhance the role of the private sector through the privatization of government healthcare services, to increase public-private participation, and healthcare delivery models, to scale up medical education and training of its local workforce and to boost the adoption of digital information systems. Thereby it creates a plethora of opportunities for investors, pharmaceutical and MedTech manufacturers, healthcare IT vendors, and support services.
The size of the Saudi Arabian infrastructure sector market is projected to be USD 36 billion in 2024 and is anticipated to increase at a CAGR of 4.48% to reach USD 44.81 billion by 2029. Saudi Arabia has declared plans to invest trillions of dollars in infrastructure, to diversify its economy away from oil and establish itself as a major international center for logistics and investment.
Mining is a target for transformation in Saudi Arabia and is intended to be the third pillar of the oil, gas, and petrochemical industries. Many factories, as many as 1,801, with a capital of US$ 18.3 billion, are under construction.
