Saudi construction sector sees strong growth

Strong Saudi construction

It appears the Middle Eastern construction industry is almost fully recovered from the global recession and the Dubai debt crisis as a new report states that Saudi Arabia's construction industry "will continue to present opportunities to investors over the next four years as infrastructure continues to be central to the government's expenditure plan".

The report from Business Monitor International's Key Projects Database states that in the Kingdom the construction sector is expected to see seven percent growth over the course of the year, fuelled by investment in projects currently under construction or in the planning stage.

Currently, over US$80 billion worth of infrastructure projects are underway in Saudi Arabia, which boasts one of the largest construction industries in the Middle East. The sheer number of projects means that Saudi Arabia is expected to see a growth of over four percent per year between 2010 and 2014.

Quoting the report the growth is "not exactly booming, (but) considering the size of the industry, it is strong".

Over the four year period, industry value is expected to soar from US$24.57 billion to US$37.70 billion.

"Stable and growing demand"

The report said that the results showed "strong fundamentals for continued demand for construction projects, from housing to transport.

"Saudi Arabia's strong native population is a key factor behind the stable and growing demand for infrastructure in the country. Another integral element is the government's commitment to infrastructure investment and its ability to support these plans with funding.

"This strong growth in the face of difficult access to credit and a global recession illustrates just how resistant the Saudi Arabian construction industry is. Compared to many other countries in the region that rely on demand from expatriates or the tourism sector, Saudi Arabia's infrastructure projects are in response to actual, sustainable demand from a native population."

Most of the investment has gone into housing due to major shortfalls in units.

Relevant articles:

Is the UAE construction sector regaining confidence? | UAE construction firms expanding? | Is Dubai's construction sector recovering? | What has 2009 meant for MENA construction?

Timon Singh

Timon Singh is a graduate of Liverpool University where he received a degree in Social and Economic History. He has previously worked for BBC Magazines on BBC Who Do You Think You Are? Magazine, the publication for the popular genealogy show.

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