Saudi Arabia Construction Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Saudi Arabia Construction Market Analysis

The Saudi Arabia Construction Market size is estimated at USD 74.11 billion in 2025, and is expected to reach USD 96.26 billion by 2030, at a CAGR of 5.37% during the forecast period (2025-2030).

Saudi Arabia's construction sector is undergoing a transformative phase characterized by unprecedented mega-projects and infrastructure construction developments. The kingdom currently oversees more than 5,200 construction projects with an estimated cumulative value of USD 819 billion, demonstrating the massive scale of development initiatives. These projects span various sectors, including urban development, transportation infrastructure, and religious tourism facilities, with significant emphasis on expanding the Great Masjid of Mecca as part of Vision 2030. The scale of these developments reflects Saudi Arabia's commitment to diversifying its economy and establishing itself as a global construction industry hub.

Technological innovation is revolutionizing the Saudi Arabian construction industry landscape, with contractors increasingly adopting automated solutions and advanced technologies. The implementation of construction robotics, AI-assisted drones, and 3D printing technologies is transforming traditional construction methodologies. This technological evolution aligns with the Saudi National Industrial Strategy's goal of achieving global leadership in high-technology manufacturing and development. The integration of these advanced technologies is not only enhancing efficiency but also improving safety standards and reducing operational costs across construction projects.

The kingdom's commitment to sustainable construction and intelligent urban development is exemplified by groundbreaking projects like NEOM's The Line, a USD 500 billion linear city initiative launched near Riyadh. This ambitious development, spanning 170 kilometers, represents a paradigm shift in urban planning with its focus on environmental preservation and human well-being. The project's infrastructure construction is gaining momentum, as evidenced by the recent USD 1.5 billion contract awarded to a joint venture between Italy's Webuild and Saudi Arabia's Sajco for constructing a high-speed rail line, which includes a 57-kilometer connector train to Oxagon, NEOM's industrial center.

Public-private partnerships are emerging as a cornerstone of Saudi Arabia's construction sector development strategy. The government is actively encouraging private sector participation through various initiatives and investment opportunities. This collaborative approach is particularly evident in the development of new cities and industrial clusters, with projects being executed across Rabigh, Medina, Hail, Jazan, Tabuk, and the Eastern Province. The partnership model is facilitating the transfer of technical expertise while ensuring the efficient allocation of resources and risk-sharing between public and private entities, thereby accelerating the pace of smart construction and infrastructure development across the kingdom.

Saudi Arabia Construction Market Trends

Government Infrastructure Initiatives and Vision 2030

The Saudi Arabian government's commitment to infrastructure construction through Vision 2030 serves as a primary driver for the construction market. The establishment of the National Infrastructure Fund in October 2021 to assist projects totaling USD 53 billion demonstrates the government's dedication to transforming the economy and reducing dependence on oil revenues. This initiative is further strengthened by the government's focus on prominent tasks including housing, roads, ports, railways, airports, communications, information technology, postal services, and industrial cities, with substantial allocations for infrastructure development.

The government's strategy includes implementing over 500 billion riyals worth of mega-projects in airports, seaports, rail, and other infrastructure by the end of the decade. This comprehensive approach encompasses the development of special economic zones throughout the Kingdom as hubs for petrochemicals, mining, logistics, manufacturing, and digital industries. The strategy is complemented by the creation of "economic cities" and the implementation of city infrastructure projects such as the Riyadh Rapid Bus Transit System, showcasing the government's holistic approach to infrastructure development.

Tourism and Hospitality Sector Expansion

The robust growth in Saudi Arabia's tourism and hospitality sector is significantly driving construction management market activity. The Kingdom's position as the world's third-largest market for hotel construction, behind only China and the US, reflects the massive scale of hospitality infrastructure development. The construction landscape is particularly dominated by high-end developments, with first-class four-star properties accounting for 77 projects and 30,229 rooms, while the five-star luxury segment comprises 90 builds with 33,524 keys, demonstrating the market's focus on premium hospitality infrastructure.

The development of tourist attractions meeting international standards and potential UNESCO World Heritage Sites is driving construction activity across multiple regions. Several multi-billion-dollar giga-projects focused on tourism, including Qiddiya, the Red Sea Project, and Amaala, continue to progress, supported by the Tourist Investment Fund with initial capital of USD 4 billion. This expansion is further bolstered by the entertainment sector's growth, with companies like AMC and Vox developing hundreds of movie theaters, and the government seeking agreements for film production studios, creating additional construction services opportunities across the hospitality and entertainment spectrum.

Maritime and Logistics Infrastructure Development

The remarkable expansion of Saudi Arabia's maritime and logistics infrastructure is emerging as a crucial driver for the construction sector. In 2023, Saudi ports demonstrated significant growth with a 9% increase in annual container handling to 11,380,302 units, reflecting the need for expanded infrastructure. This growth has catalyzed substantial construction activity, with Mawani signing agreements to establish five new logistics parks and centers in 2023, representing investments exceeding SAR 4 billion, including developments at King Abdulaziz Port in Dammam and Jeddah Islamic Port.

The sector's momentum is further evidenced by major infrastructure projects such as the Jeddah South Container Terminal development, which includes comprehensive infrastructure works covering 100,000 m2. The scope encompasses earthworks, pavement surfaces, electrical grids, sewage networks, and fire protection systems. Additionally, the establishment of 28 new maritime services connecting Saudi ports to global seaports has necessitated the construction of supporting infrastructure, complemented by 16 partnership agreements with international ports and national entities, driving continued construction activity in the maritime sector.

Commercial Real Estate Expansion

The unprecedented demand surge in Saudi Arabia's commercial real estate sector is driving significant commercial construction activity, particularly in major urban centers. The office sector in Riyadh has witnessed exceptional demand, with Grade A offices reaching 97% occupancy rates and Grade B spaces maintaining 85% occupancy, necessitating new construction projects to meet the growing demand. This trend extends beyond Riyadh to other major cities like Jeddah and Dammam, where steady increases in demand are fueling construction of new office spaces.

The retail sector is undergoing a transformative phase, with 184,000 square meters of new retail developments planned for completion by 2025, focusing on food and beverage outlets, entertainment facilities, and public realm spaces. This lifestyle shopping revolution, particularly prominent in Riyadh and Jeddah, is driving the construction of modern retail infrastructure. The sector's evolution is further supported by the development of new commercial centers and galleries, with projects incorporating advanced features and amenities to meet changing consumer preferences and lifestyle needs.

Segment Analysis: By Sector

Commercial Segment in Saudi Arabia Construction Market

The commercial construction segment has emerged as the dominant force in Saudi Arabia's construction market, commanding approximately 28% of the total market share in 2024, with a value of USD 17.526 billion. This segment's strong performance is largely driven by significant developments in office spaces, particularly in Riyadh, where the total stock reached 4.4 million square meters. The Royal Commission for Riyadh's initiative to attract up to 500 global corporations to establish regional headquarters in the city has been a major catalyst for commercial construction growth. Additionally, the hospitality sector within commercial construction has seen remarkable expansion, with over 5,500 new hotel rooms being added to accommodate growing tourism demands. The development of entertainment facilities and shopping centers has further bolstered the segment's dominance, with companies planning to increase their total leasable space by 52% compared to 2020 levels.

Residential Segment in Saudi Arabia Construction Market

The residential construction segment is demonstrating the strongest growth trajectory in the Saudi Arabian construction market, with an expected growth rate of approximately 6% during the forecast period 2024-2029. This robust growth is being fueled by the government's ambitious housing initiatives and significant support through residential mortgage programs. The sector has witnessed increased construction activity with around 26,500 units delivered across major cities in recent periods. The government's commitment to accelerating homeownership rates has led to the implementation of various housing projects, with plans to complete 100,000 homes by the end of 2023, bringing Riyadh's total housing stock to 1.4 million units. The segment's growth is further supported by substantial government backing through subsidized loan programs and housing options, benefiting thousands of households across the kingdom.

Remaining Segments in Saudi Arabia Construction Market

The remaining segments - Infrastructure, Energy and Utilities, and industrial construction - each play vital roles in Saudi Arabia's construction market development. The infrastructure segment is crucial for the kingdom's vision of becoming the most important logistics hub in the region, encompassing major transportation projects and urban development initiatives. The energy and utilities segment is instrumental in supporting the kingdom's ambitious renewable energy goals and utility infrastructure development, including significant investments in solar and wind power projects. The industrial construction segment, while smaller in market share, remains essential for supporting the kingdom's industrial diversification goals, particularly in developing manufacturing facilities, warehouses, and logistics centers. These segments collectively contribute to the comprehensive development outlined in Saudi Vision 2030, supporting economic diversification and modernization efforts. Additionally, the use of advanced construction equipment and high-quality construction materials is pivotal in achieving these ambitious projects.