Saudi Arabia’s Construction Sector Thriving with Projected $181.5 Billion Output Value by 2028
In a groundbreaking analysis by global property consultancy Knight Frank, Saudi Arabia’s construction output value is set to skyrocket to $181.5 billion by the end of 2028, marking a remarkable 28 percent increase over five years.
Key Drivers of Growth
The Kingdom’s construction sector saw a significant rise in output value to $141.5 billion in 2023, fueled by robust activities in residential, institutional, and infrastructure projects, as well as industrial, energy, utilities, and commercial divisions. This surge in construction investments is not only bolstering the economy but also solidifying Saudi Arabia’s position as a global hub for tourism, commerce, and trade.
Giga-Projects and Ambitious Goals
Saudi Arabia’s ambitious giga-projects, including the $500-billion-megacity NEOM, are paving the way for monumental developments. By the end of the decade, the Kingdom aims to deliver over 660,000 residential units, more than 320,000 hotel keys, over 5.3 million sq. m. of retail space, and more than 6.1 million sq. m. of new office space. These projects are reshaping the urban landscape and attracting billions in investments.
Transformation and Investment Goals
Mohamed Nabil, head of Project and Development Services for the Middle East and North Africa at Knight Frank, emphasized the historical transformation unfolding in Saudi Arabia’s construction sector. The government’s ambitious target is to attract over $3 trillion in investments by 2030, underscoring the massive scale and value of ongoing development projects.
Residential Dominance and Continued Growth
The residential division remains a powerhouse in the construction sector, accounting for 31 percent of the total output value in 2023. With projections indicating a surge to $56.9 billion by 2028, driven by flagship developer ROSHN’s plans to construct over 400,000 homes, the sector is poised for continued growth.
Infrastructure Investments and Urban Expansion
Riyadh takes the lead in contract award value at $54 billion, followed by Makkah and Tabuk province. The transportation sector is also a key focus, with significant investments in infrastructure to accommodate the growing population, exemplified by projects like the King Salman International Airport.
Global Construction Activity Leadership
Saudi Arabia’s emergence as a global construction activity leader is evident, with $1.5 trillion worth of projects in the pipeline. Vision 2030’s economic diversification strategy is driving much of this growth, with giga-projects like NEOM and The Line spearheading the Kingdom’s developmental boom.
Future Outlook and Growth Trajectory
As Saudi Arabia races towards realizing Vision 2030, the urban landscape is undergoing a transformative change. With a surge in planned residential units, office space, retail areas, and hotel accommodations, the Kingdom is poised to accommodate a projected population of 40 million and 150 million visitors by 2030.
Focus on Western Region Development
The Western region of Saudi Arabia is a hotspot for development, with plans valued at $692 billion, accounting for a significant portion of the total expansion plan. Luxurious residential supply, hotel accommodations, retail outlets, and office spaces are set to experience extensive growth, further solidifying the region’s position as a key developmental hub.
Conclusion
With a flurry of construction activities, giga-projects, and transformative initiatives, Saudi Arabia’s construction sector is on a trajectory of unprecedented growth and development. As the Kingdom marches towards its Vision 2030 goals, the landscape of Saudi Arabia is being reshaped into a modern, thriving hub of innovation and progress.