Saudi Arabia Construction Industry Overview
|Study Period:||2019 - 2028|
|CAGR:||> 6 %|
*Disclaimer: Major Players sorted in no particular order
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Saudi Arabia Construction Market Analysis
The Saudi Arabian construction market is expected to register a CAGR of more than 6% during the forecast period. The market is driven by Riyadh’s Vision 2030 national development agenda for the diversification and privatization of the giant Saudi economy, which includes a raft of vast megaprojects such as the Neom future cities, Qiddiya entertainment city, and the Red Sea Project, Saudi Arabia offers the region’s biggest pipeline of future construction opportunities.
The Saudi Arabian construction market is facing many challenges as a result of the impact of the COVID-19. Saudi Arabia's construction industry has been severely hit by the impact of the pandemic, with the pace of construction contract awards falling sharply in 2020 and 2021. The Saudi Government has begun to tighten restrictions on foreign investment by implementing more restrictive requirements for obtaining a foreign investment license. Severe restrictions have been placed specifically on foreign entities seeking to engage in construction activities in Saudi Arabia.
The government’s focus has increasingly turned to the housing shortage in Saudi Arabia, which is occurring as a result of the increasing growth of the population. The huge demand for construction services is evidenced by a great demand for cement and other building materials, as well as the number of ongoing and new projects in Saudi Arabia. The construction industry's output is expected to be supported by the government's focus on the development of overall infrastructure, as well as energy and utilities construction projects, in a bid to diversify its economy away from oil.
Saudi Arabia Construction Industry Segments
Construction is an industry that includes the erection, maintenance, and repair of buildings and other immobile structures and the building of roads and service facilities that become integral parts of structures and are essential to their use. The Saudi Arabian construction market is segmented by sector (residential, commercial, industrial, infrastructure (transportation), and energy and utilities construction). The report offers market size and forecasts for the Saudi Arabian construction market in Value (USD billion) for all the above segments.
|Energy and Utilities Construction|
Saudi Arabia Construction Market Trends
This section covers the major market trends shaping the Saudi Arabia Construction Market according to our research experts:
Decrease in the Total Value of Construction Contracts Awarded in Saudi Arabia
Saudi Arabia’s economy is going through a great shift from being highly dependent on oil revenues to more increased diversification and investments in non-oil sectors. The total value of construction contracts awarded in Saudi Arabia during 2020 collapsed as compared to the same period in 2019 as the economic impact of the COVID-19 pandemic continued to spread. Saudi Arabia's construction industry has been severely hit by the impact of the pandemic, with the pace of construction contract awards falling sharply in 2020 and 2021
The pandemic and its disruption of global supply chains have increasingly affected construction activities, with shortages of raw materials, contractors, and workers. Construction companies are showing an inclination towards employing only skilled labor for construction activities and prefer to hire skilled electricians, carpenters, etc. However, Saudi Arabia lacks a skilled labor force, which poses a challenge for the construction sector.
The Government of Saudi Arabia is facing several challenges, especially in controlling the fiscal debt, diversifying government revenues, and minimizing dependence on oil. As of 2020, the total value of actual construction contract awards in Saudi Arabia amounted to USD 22.85 billion.
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The Increasing Population of Saudi Arabia Boosting the Demand in the Construction Sector
Saudi Arabia, the second-largest Arab state, is a nation in development. In a developing country, there is a tendency for the population to move to more urban cities where the employment rates are higher. The degree of urbanization in Saudi Arabia has grown from 2017 to 2020. Some of the biggest cities in Saudi Arabia have witnessed the urbanization changes first-hand. The capital of Saudi Arabia and the biggest city, Ar-Riyad, is home to about five million inhabitants.
However, the high number of illegal immigrants in Saudi Arabia also accounts for the total population. With a rapidly growing total population, the government has set some rules to avoid overcrowding and overpopulation. With the increasing population, there is increasing demand for residential houses and other infrastructure facilities in the country. This is boosting the demand for the construction sector in Saudi Arabia. This statistic shows the total population of Saudi Arabia from 2017 to 2020. In 2020, Saudi Arabia's total population amounted to 35.01 million inhabitants.
Saudi Arabia Construction Market Competitor Analysis
The Saudi Arabian construction market is fragmented and competitive, owing to the presence of major local and international players. However, the market holds opportunities for small and medium players due to increasing government investments in the sector. Saudi Arabia Construction Market presents opportunities for growth during the forecast period, which is expected to drive market competition further.
Saudi Arabia Construction Market Top Players
Tekfen Construction and Installation Co. Inc.
Gilbane Building Co.
*Disclaimer: Major Players sorted in no particular order
Saudi Arabia Construction Market Recent Developments
December 2021: Bechtel recognized Fluid Controls and Components Inc., or FCCI, with one of four 2020-21 Global Supplier Awards for its contributions to the Hanford Waste Treatment and Immobilization Plant, known as the vit plant.
December 2021: Bechtel and Nautilus Team planned to build unique floating data centers. The multi-year program allows Nautilus to deploy its water-based system for sustainable and efficient data center cooling, while Bechtel focuses on development and construction.
Saudi Arabia Construction Market Report - Table of Contents
1.1 Study Assumptions
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
2.1 Analysis Methodology
2.2 Research Phases
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Current Economic and Construction Market Scenario
4.2 Technological Innovations in the Construction Sector
4.3 Spotlight on Key Ongoing and Upcoming Projects
4.4 Industry Value Chain/Supply Chain Analysis
4.5 Impact of Government Regulations and Initiatives on the Industry
4.6 Impact of COVID-19 on the Market
5. MARKET DYNAMICS
5.4 Porter's Five Forces Analysis
5.4.1 Bargaining Power of Suppliers
5.4.2 Bargaining Power of Consumers/Buyers
5.4.3 Threat of New Entrants
5.4.4 Threat of Substitute Products
5.4.5 Intensity of Competitive Rivalry
6. MARKET SEGMENTATION (Market Size By Value)
6.1 By Sector
6.1.4 Infrastructure (Transportation)
6.1.5 Energy and Utilities Construction
7. COMPETITIVE LANDSCAPE
*List Not Exhaustive
7.2 Company Profiles
7.2.2 CB&I LLC
7.2.3 Fluor Corp.
7.2.4 Tekfen Construction and Installation Co. Inc.
7.2.5 Gilbane Building Co.
7.2.7 AL Jazirah Engineers & Consultants
7.2.8 Al Latifa Trading and Contracting
7.2.9 Afras For Trading And Contracting Company
7.2.10 Al-Rashid Trading & Contracting Company*
7.3 Other Companies (Key Information/Overview)
8. FUTURE OF THE MARKET
Saudi Arabia Construction Market Research FAQs
What is the study period of this market?
The Saudi Arabia Construction Market is studied from 2019 - 2028.
What is the growth rate of Saudi Arabia Construction Market?
The Saudi Arabia Construction Market is growing at a CAGR of >6% over the next 5 years.
Who are the key players in Saudi Arabia Construction Market?
Bechtel, CB&I LLC, Fluor Corp., Tekfen Construction and Installation Co. Inc., Gilbane Building Co. are the major companies operating in Saudi Arabia Construction Market.
Saudi Arabia Construction Industry Reports
In-depth industry statistics and market share insights of the Saudi Arabia Construction sector for 2020, 2021, and 2022. The Saudi Arabia Construction research report provides a comprehensive outlook of the market size and an industry growth forecast for 2023 to 2028. Available to download is a free sample file of the Saudi Arabia Construction report PDF.