Saudi Arabia Construction Market Overview

Market Size in 2024 : USD 97.8 Billion

Market Size in 2033: USD 135.6 Billion

Market Growth Rate 2025-2033: 3.7%

According to IMARC Group's latest research publication,"Saudi Arabia Construction Market Size, Share, Trends and Forecast by Sector and Region, 2025-2033", The Saudi Arabia construction market size was valued at USD 97.8 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 135.6 Billion by 2033, exhibiting a CAGR of 3.7% from 2025-2033.

Growth Factors Driving the Saudi Arabia Construction Industry

• Vision 2030’s Push for Economic Diversification

The driving force of the construction boom in Saudi Arabia is its Vision 2030 which intends to dispel oil addicts by making huge investments in infrastructures. The budget plan in the government includes the allocation of $333.6 billion towards 2025 with a specific allocation of $10.1 billion towards infrastructure and transportation projects. A mega-project such as the NEOM, a futuristic city worth around half a trillion dollars, and Qiddiya, an entertainment center worth almost 10 billion dollars, is driving up construction service demand. These projects span the world to attract powerful organizations Bechtel and Larsen and Toubro, which enhances the local economies and provides jobs. The Public Investment Fund (PIF) is of importance and funds such ambitious projects that are aimed at diversifying the source of revenue. By giving extra attention to the non oil based industries such as tourism and real estate sector this makes the industry have a constant stream of high value projects which would boost the industry.

• Surge in Housing Demand

Due to fast population growth and urbanization, the kingdom of Saudi Arabia is experiencing a housing boom. The residential market represents the 39.1 percent of the construction expenditures and includes such projects as ROSHN project, Sedra that will accomplish 30, 000 units over 20 million square meters in Riyadh. National rents increased by 8.1 percent last year and forced banks to increase real-estate lending by 8 percent to 22 percent of corporate credit. The ESKAN project of the government intends to construct 500,000 housing units, which will solve affordability and supply issues. Meeting this demand is important through partnerships with private developers, such as the Nesma & Partners. The need of affordable and luxury homes continues to grow in the urban areas such as Jeddah and Dammam, and this further encourages the construction undertakings and provides room to propel the construction process with the assistance of modular forms of building construction.

• Tourism and Cultural Investments

One of the major construction drivers is the fact that Saudi Arabia is emphasizing on becoming an international tourist destination. By 2030, the government wants 31 million tourists to visit the country annually and developments such as the $19.9 billion Jeddah Central will incorporate cultural, shopping, and residential areas. The 2 million square meters development project in Jabal Omar in Makkah also assists the pilgrims to the city with hotels and shopping areas. The support to such projects as Al Ula, a 15-billion-dollar cultural center, makes the region even more attractive. The boom in construction of hotels is one of the thousands of new rooms planned among them 31,957 in Makkah. The companies such as Almabani General Contractors are cashing in on this putting up infrastructural investments in encouraging the growth of tourism, which in turn provides employment opportunities and enhances the demand of advanced construction solution.

Trends in the Saudi Arabia Construction Market

• Sustainable Construction Practices

This is restructuring the construction industry in Saudi Arabia as environmental targets line up with Vision 2030. Green building technologies such as solar-powered modular homes are gaining momentum that is why SIBS won a contract to supply 2,174 of these units to NEOM. Modern construction initiative involves stimulating the use of eco-friendly materials, which cut down wastage to as much as 90 percent at factory-levels. It校✦ participates in initiatives such as the Red Sea Project, estimated at 23.6 billion dollars due to emphasis on renewable power and green designs. Firms such as Kabbani Construction Group are implementing the practices thus reducing the cost and achieving international standards. The trend demonstrates the increased popularity of the energy-efficient buildings level dependent on governmental regulations and customer demands, making the industry one of the leaders in environmentally responsible development.

• Technological Advancements in Construction

The construction industry in Saudi Arabia is revolutionizing with technologies and remarkably improving efficiency and safety. BIM, drones, and IoT sensors are the new norm, and companies such as Fluor Corp. are already using them to make their projects more streamlined. As an example, the 57km high-speed railway of NEOM, developed by Webuild, makes use of digital tools in order to enjoy precision. The government markets its smart cities at a total of $14.74 billion, which drives the technological inclusion as evidenced in Oxagon projects, which apply AI to real-time operations. The developments reduced costs and speed, which resolved labor shortage and was worsened by the use of foreign labor. Contractors who have embraced the technology such as the Almabani have a competitive advantage and this helps to keep projects such as the 2.1 billions Riyadh road developments on schedule and on budget.

• Mixed-Use Urban Developments

Saudi cities are being reshaped by mixed-use developments, as housing, stores, and places of entertainment are becoming part of a single development. There are projects such as King Salman Park and the Jeddah Central with its 19.9 billion dollars in the making which contributes to a demand of the walkable urban center through the lifestyle amenities on offer. The Grade A occupancy in the office market in Riyadh is 97 per cent and indicates growth in the commercial environment. Companies in development such as ROSHN are setting precedents with Alarous, where housing is mixed up with culture. With these projects financed by listed investment in entertainment summing up to $32 billion, beautiful communities are built, and this brings new firms such as AlKifah Contracting. There are population of expanding expatriates and this trend is in the same line with the objectives in urban scenario in vision 2030, transforming city forms and increasing the level of real estate lending by 22%.

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Saudi Arabia Construction Industry Segmentation:

The report has segmented the market into the following categories:

Analysis by Sector:

• Residential
• Commercial
• Industrial
• Infrastructure (Transportation)
• Energy and Utilities Construction

Regional Insights:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region

Competitive Landscape:

The report provides a comprehensive analysis of the competitive landscape in the Saudi Arabia construction market with detailed profiles of all major companies, including:

• AFRAS
• AL Jazirah Engineers & Consultants
• Al Latifa Trading and Contracting
• Bechtel Corporation
• Fluor Corporation
• Gilbane Inc. 
• Jacobs
• Tekfen Construction

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Future Outlook

A robust growth in the construction industry is anticipated in Saudi Arabia due to the fact that Vision 2030 has a project pipeline of up to 2.1 trillion dollars. The sector will experience continuous demand in residential, tourism, and infrastructure as it has 5,200 current projects of value of $819 billion. Long runs are guaranteed by investments in renewables, up to 58.7 GW in 2030, and by the transport projects worth 213 billion. Such partnership will result in companies such as Saudi Binladin Group and Nesma & Partners taking advantage of the ease in foreign investment legislation and partnerships. Nonetheless, challenges such as shortages of skill labour and fluctuation of the cost of materials are ongoing. Inculturalization and adoption of technologies such as BIM, and implementing sustainable practices will play an important role in addressing these challenges. With Riyadh and Jeddah holding 63% of contracts, the smart cities and tourism centers program in the industry will consolidate Saudi Arabia as a global hub in the construction sector.

Research Methodology:

The report employs a comprehensive research methodology, combining primary and secondary data sources to validate findings. It includes market assessments, surveys, expert opinions, and data triangulation techniques to ensure accuracy and reliability.

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