Saudi Arabia Construction Industry Analysis & Research Report

 Saudi Arabia Construction Market Size and Share:

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. The market is driven by the growing development of luxury estates and apartments, increase in the opening of shopping malls, amusement parks, and various other entertainment centers, and rising focus on green building practices.

A rise in the proliferation of several mega projects is driving the market in Saudi Arabia. These projects are promoting economic diversification and developing tourism and entertainment factors in the kingdom. The Public Investment Fund (PIF) is implemented as an important step in financing these projects, thereby driving demand for infrastructure development and opening up opportunities for global and local contractors. These investments are generally massive and have a cascading effect on the various construction-related industries like engineering, procurement, and construction (EPC) services to create demand for building materials, equipment, and workforce.

Besides this, reforms in the housing sector involve partnerships between the public and private sectors to increase supply, as well as address issues related to affordability. These partnerships are quite instrumental in closing the housing gap, where private developers are increasingly becoming involved in residential construction projects. Even though there is a need for affordable housing, there is also a consistent requirement for luxury buildings among the affluent class. In addition, technological advancements in building, including modular construction and 3D printing, are adopted to accelerate construction timelines and decrease costs. In addition, road networks and urban transit systems are being built to increase mobility within cities and regions.

Saudi Arabia Construction Market Trends:

Government-Led Mega-Projects and Vision 2030 Initiatives

The Saudi Arabian market is heavily driven by the government's Vision 2030 reform plan, which focuses on economic diversification and reducing reliance on oil revenues. Mega-projects such as NEOM, Qiddiya, and The Red Sea Project are at the core of this transformation, driving significant demand for construction activities across sectors, such as real estate, infrastructure, tourism, and entertainment. These projects are envisioned to be a growth catalyst in the economy and designed to put Saudi Arabia at the global forefront as a business, cultural, and innovative hub. During 2024, progress was made on some of the high-profile projects. In 2024, the luxury island destination Sindalah is opened. It forms part of the $500 billion NEOM mega project, which deals with developing the tourism industry of Saudi Arabia. Meanwhile, Amaala, one of the Saudi luxury tourism projects, has started its first phase in 2024 with eco-friendly luxury resorts.

Increasing Focus on Housing Development

According to the article published by macrotrends, United Nations projections said that the current population of Saudi Arabia in 2024 is 37,473,929 with a growth rate of 1.43% from 2023. As the populations increase, the urbanization centers face unprecedented demand for housing to commercial spaces as well as infrastructure. The government, via the Ministry of Municipal and Rural Affairs and Housing, is looking forward to initiating policies and programs in enhancing housing supply, affordability, and public-private partnership in the residential sector. In 2024, several housing projects were rolled out to respond to growing demand. Among these is the Ministry of Housing rolling out new developments in Riyadh and Jeddah that deliver thousands of affordable housing units. According to an article by Arab News, in 2024 Riyadh has 1.5 million residential units, following the delivery of 16,200 units in the first half of 2024. These projects work to bring integrated communities empowered with modern amenities, so it contributes to the accelerated growth of the residential construction market further.

Heightened Development of Infrastructure and Transportation Projects

Recent investments of Saudi Arabia are focused on the improvement of connectivity, modernization of transport systems, and facilitation of trade and logistics through infrastructure development. World-class infrastructure projects by the government in its ambitious rail, road, and airport projects clearly depict this. For instance, the Riyadh Metro, the Saudi Landbridge Railway, and the expansion of King Abdulaziz International Airport are transforming the transport landscape and supporting economic growth. In November 2023, Saudi Arabia announced the plan of implementing the $7bln Landbridge project at the outset of 2024. These projects highlight the importance of infrastructure development in the construction market and long-term economic diversification objectives.

Saudi Arabia Construction Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the Saudi Arabia construction market, along with forecasts at the country and regional levels from 2025-2033. The market has been categorized based on sector.

Analysis by Sector:

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

Residential construction encompasses the development of houses and places of living, including single-family homes, multi-family apartments, townhouses, and condominiums. The demand in this segment is highly affected by population growth, urbanization, and demographic changes such as increasing demand for affordable housing or luxury developments. Economic factors like interest rates and government policies on housing also significantly impact demand. New trends in the industry, from the rise of smart home technologies to the importance of energy-efficient designs, are helping redefine the sector to match new consumer preferences. The greater importance being placed on sustainable building practices has also brought to this market eco-friendly materials and green certifications as differences.

The commercial building and construction sector includes activities such as office buildings, shopping markets, hospitality venues, or entertainment facilities. Their trend is directly related to business and consumer community demand that is influenced by cyclical economic conditions and patterns of corporate expansion, further enhanced by the expansion in e-commerce. Such tendencies have been changing the pattern for designing and using spaces inside commercial buildings with emerging co-working space and incorporation of smart building systems. Additionally, urban redevelopment projects and investments in mixed-use projects that encompass residential, retail, and office space types are increasingly fashionable and typical in metropolitan areas.

The industrial construction sector includes the development of facilities for manufacturing, logistics, warehousing, and other industrial operations. This segment is driven by global trade, industrial production, and technological advancements in manufacturing processes. The demand for modern warehouses and distribution centers is rising with the growth of e-commerce and supply chain modernization. There is also growing demand for specialized facilities like data centers and research laboratories supporting emerging technologies and industries.

Infrastructure construction in the transportation sector includes roads, bridges, railways, airports, and ports. This is an important segment because it supports economic growth and connectivity by allowing goods and people to move around. Investments in this sector are often driven by government spending, public-private partnerships, and initiatives to modernize aging infrastructure. This will be by adoption of smart technologies like intelligent transportation systems (ITS) and automation in logistics hubs in transport networks.

The energy and utilities construction segment includes projects related to power generation, transmission, distribution, water management, and renewable energy development. This market is increasingly shaped by the global transition to cleaner energy sources, such as wind, solar, and hydropower, as well as efforts to modernize aging energy infrastructure. Investments in smart grids and energy storage solutions are rising to improve efficiency and reliability in electricity distribution.

Regional Insights:

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

The Northern and Central Region usually acts as a center of industrial and infrastructure development because of its strategic location, plentiful natural resources, and good communication links. The region is often dominated by large investments by the government and private sectors in infrastructural activities, such as highways, rail networks, and industrial corridors, to stimulate economic activity. Furthermore, urbanization in major cities and outlying areas fuels the demand for housing and commercial buildings. Climate and topography also have an impact on specific construction materials and techniques, with the importance of climate-resilient infrastructure on the rise. Major sectors like manufacturing, agriculture, and logistics drive the demand for industrial and utility-based construction projects.

The Western Region is often distinguished by its robust economic activity, driven by industrial hubs, financial centers, and a well-established corporate presence. Major urban centers in this region, known for their high population density and cosmopolitan nature, contribute significantly to residential and commercial construction demand. The real estate market is particularly dynamic, with substantial investments in luxury housing, retail spaces, and mixed-use developments. The region also experiences steady growth in industrial construction, with large-scale projects in the oil and gas, mining, and renewable energy sectors. Furthermore, government-backed infrastructure projects, such as port expansions and transportation corridors, play a crucial role in supporting regional connectivity and trade.

The Eastern Region is known for its rich natural resources and strong industrial base, with a focus on mining, energy, and manufacturing. This drives significant activity in industrial construction, including facilities for processing and logistics. The region is also witnessing steady growth in infrastructure projects, such as roadways, bridges, and rail connectivity, aimed at improving access to remote areas and enhancing economic integration. Urbanization in emerging cities is fueling demand for residential and commercial construction, although at a more moderate pace compared to other regions. Environmental considerations, such as the need for disaster-resilient infrastructure in areas prone to flooding or cyclones, are increasingly shaping construction practices in this region.

The Southern Region is a key player in the construction market, with its strong focus on technology, education, and manufacturing sectors. The region’s prominent information technology (IT) hubs and industrial zones drive demand for commercial spaces, office buildings, and high-tech facilities. The significant demand for residential construction, including affordable housing and premium real estate, is supporting the market growth. Additionally, the region is experiencing robust growth in infrastructure projects, particularly in transportation and energy, as governments and private players invest in expanding metro networks, highways, and renewable energy installations. The region’s coastal geography also creates opportunities for port development and maritime infrastructure, further boosting economic prospects.

Competitive Landscape:

One of the most prominent trends among key construction players in Saudi Arabia is the adoption of advanced technologies to improve project efficiency, reduce costs, and ensure timely delivery. Many firms are integrating Building Information Modeling (BIM) systems into their operations to streamline design, planning, and construction processes. BIM enhances collaboration between stakeholders and minimizes errors by providing a detailed, digital representation of the project. Similarly, companies are leveraging drones, robotics, and artificial intelligence (AI) to monitor construction sites, conduct inspections, and automate repetitive tasks. These technologies not only improve accuracy but also reduce labor costs and ensure compliance with safety standards. Sustainability is becoming a core focus for construction firms in Saudi Arabia, driven by government regulations and increasing awareness about environmental issues. In 2024, New Murabba, a PIF company received an award from Miniter of Municipalities and Housing Majed Al-Hogail, owing to its contribution as platinum sponsor at the 14^th Saudi Green Building forum in Riyadh. 

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

(Please note that this is only a partial list of the key players, and the complete list is provided in the report.)

Latest News and Developments:

• September 2024: The construction of Phase 1 of the 7.3 billion Saudi riyals ($1.947 billion) The Avenues – Khobar mall in Saudi Arabia’s Eastern Province reached 5.25% completion rate. The Avenues – Khobar, which comprises a mall and two multi-use towers spans total of area of 198,000 sqm with a gross leasable area (GLA) of 167,000 sqm. 
• October 2024: Saudi Arabia is planning the construction of The Mukaab, a one of a king cube shaped skyscraper in Riyadh. The building is 400 meters and aims to be world’s largest building after completion.

Saudi Arabia Construction Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Saudi Arabia construction market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the Saudi Arabia construction market.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Saudi Arabia construction industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.