Saudi Arabia’s Construction Sector Poised for Significant Growth
Saudi Arabia’s construction sector is set for notable expansion, with market research from P&S Intelligence projecting an increase in value from USD 70.4 billion in 2024 to USD 97.4 billion by 2030, at a compound annual growth rate of 5.6%, according to P&S Intelligence.
This growth is fueled by the government’s major investments in infrastructure, housing, tourism, and renewable energy, all central to the Vision 2030 plan. Vision 2030 aims to diversify the economy and lessen reliance on oil, with transformative projects such as Neom, Qiddiya Entertainment City, and the Red Sea Project driving demand for construction. The sector is also advancing technologically, with increased use of AI, IoT, 3D printing, and sustainable building practices.
Among market segments, the residential sector is expanding fastest, with a 5.9% CAGR, as urbanization boosts housing needs in cities like Riyadh, Jeddah, and Dammam. Al-Riyadh leads in construction activity, while Al-Madinah is experiencing rapid growth due to strategic investments, particularly in tourism and infrastructure. The Red Sea Project, covering 34,000 square kilometers, highlights the region’s focus on tourism and hospitality development.
The market is highly competitive, involving both local and international firms, especially in the large-scale Vision 2030 projects. Government incentives and a focus on sustainability are increasing competition and innovation. However, a shortage of skilled labor—largely filled by expatriates—poses challenges such as potential project delays and higher costs.
Sustainability is becoming a priority, with green building materials and energy-efficient designs aligning with Vision 2030’s environmental goals. These trends, along with ongoing policy support, are expected to further accelerate growth and transformation in Saudi Arabia’s construction industry over the coming years.
