Saudi Arabia’s construction sector is experiencing rapid expansion, with projects valued at more than $1.7 trillion, according to management consultancy Turner & Townsend. This surge is a key part of the Kingdom’s Vision 2030 plan to diversify the economy beyond oil, driving major growth in commercial real estate, infrastructure, tourism, and technology.
Riyadh is now among the world’s most expensive cities to build in, with average construction costs reaching about $3,112 per square meter, as reported by Turner & Townsend. Rising material costs, shortages of skilled labor, and ongoing supply chain challenges are pushing prices higher.
Government investment remains strong, with SAR1.3 trillion ($346.6 billion) allocated in the 2025 national budget for construction and infrastructure. Non-oil sectors grew by 4.3 percent in 2024, and major developments include transportation, water, electricity, and sewage projects. The National Water Company is leading several large sewage initiatives in Jeddah, each with budgets over $200 million, to improve environmental standards.
Demand is high across multiple construction segments. Grade A office spaces in Riyadh have occupancy rates above 97 percent, reflecting a robust commercial property market. Tourism and leisure investments are approaching $1 trillion, generating over 1.6 million jobs and enhancing the country’s global profile. Additionally, industrial and logistics facilities are expanding quickly, fueled by e-commerce and national development programs.
Despite strong growth, the sector faces challenges, notably a shortage of skilled workers in areas like mechanical engineering and sustainability-focused roles. These shortages are increasing competition, raising costs, and lengthening equipment delivery times to up to 25 weeks.
Turner & Townsend’s report remains optimistic. Certain market segments, such as office fit-outs, offer profit margins of up to 15 percent, signaling continued opportunities in a rapidly evolving industry.
