BrazilSaudi Arabia’s construction spending to hit $150 billion in 2025
There has been a massive boom in construction projects in Saudi Arabia in recent years as the country enjoys a strong economic situation and rapidly builds up its urban areas. Analysis from Knight Frank shows that the KSA’s total construction output value is expected to hit $150 billion by 2025.
Construction activity is surging in Saudi Arabia, and the current value of construction output for residential, institutional, infrastructure, industrial, energy and utilities, and commercial sectors has reached $142 billion, up 4.3% on last year.
A lot of the growth in construction is linked to Saudi Arabia’s aspirations for the future. The country’s ambitious Vision 2030 plan prioritizes the growth of industries outside of the dominant energy sector. Saudi leaders have been working hard to position the country as a leader in tourism, commerce, and trade.
The projections for the growth in construction output in the KSA see the total value peaking over $180 billion by 2080. Most of that is comprised of residential buildings and infrastructure related to energy and utilities. Infrastructure construction is expected to grow more substantially than other areas in the future.
Notably, 38% of the existing contract award value is for projects in the Riyadh province, equating to $54 billion, followed by Mecca and the Tabuk provinces at $28.7 billion and $28.5 billion, respectively.
“While construction sector contract awards account for 61% of the total value, the transportation sector follows in second place at 33%, highlighting the significant investment being made in bolstering the capital’s transportation infrastructure as the population swells to a projected 10 million by 2030,” said Mohamed Nabil, regional partner and head of Project & Development Services at Knight Frank.
Further reading: Middle East faces heaviest delays in construction projects.
Western Saudi Arabia is expected to be the focal point of the future of the construction boom in the country. The most visible impact of Vision 2030 has been the emergence of new super-cities, or so-called ‘giga projects’, which are mainly in the Western part of the country.
There are currently 25 giga projects in Saudi Arabia that are at various stages of planning or construction. All construction plans in Western Saudi Arabia together account for around $690 billion, a little more than half of the country’s total development plan.
“We are currently witnessing a historical transformation unfolding in Saudi Arabia with construction projects standing out in their design scale and value,” said Nabil.
“Given the scale of development pipeline, the government is hoping to attract over $3 trillion in investments by 2030, a figure recently confirmed the minister of investment during the inaugural Sino-Gulf Cooperation for Industries and Investments Forum in China.”
In another sign of Saudi Arabia’s rise on the global stage, the country last year joined the $1 trillion club and overtook Switzerland to become the 19th economy worldwide.
