Saudi Arabia Dominates Global Construction Scene in Q1
In a groundbreaking report, JLL has identified Saudi Arabia as the powerhouse driving global construction activity in the first quarter of the year, boasting an impressive $1.5 trillion pipeline of unawarded projects.
Kingdom Leads MENA Region with $3.9 Trillion Projects
Taking a lion’s share of 39 percent of the total construction projects in the Middle East and North Africa (MENA) region, Saudi Arabia is leading the pack with projects valued at $3.9 trillion.
Construction Assets Sector Reigns Supreme
Within the Kingdom’s pipeline, the construction assets sector takes the crown with a whopping 62 percent share, amounting to $950 billion. Transportation, infrastructure, and other utilities make up the remaining 38 percent, totaling $582 billion as per insights from MEED Projects.
Resilience in the Face of Uncertainties
Laura Morgan, market intelligence lead at JLL, commended Saudi Arabia’s economic growth and modernization efforts, highlighting the Kingdom’s resilience amidst global uncertainties. The real estate sector is spearheading the Kingdom’s projects market in 2023.
Promising Growth Forecast
JLL’s report forecasts a potential 2.1 percent GDP growth in 2024 and a significant 5.9 percent growth in 2025 for Saudi Arabia. The country’s progress on Vision 2030 giga-projects and infrastructure developments has solidified its position as a construction leader globally.
Challenges Ahead
Despite the positive outlook, challenges such as inflation, interest rates, and geopolitical tensions loom over Saudi Arabia’s construction sector. The shortage of skilled labor and market constraints could potentially strain the Kingdom’s construction activity.
Stable Material Availability Amidst Disruptions
JLL’s analysis indicates stable material availability in the first quarter, despite disruptions and supply challenges. While the reliance on imported materials persists, there are promising signs of improvement in local manufacturing capabilities spurred by demand from major projects in Saudi Arabia.