A Top MENA Opportunity
Saudi Arabia is positioning itself as a leading player in the construction industry, driven by its Vision 2030 plan. This ambitious initiative aims to diversify the economy beyond oil, boost key sectors, and transform the country into a global hub for business, culture, and innovation. With its impressive economic growth and large-scale infrastructure projects, Saudi Arabia is emerging as a top destination for construction investments in the MENA region.
Vision 2030: A Blueprint for Growth
Vision 2030, launched in 2016 by Crown Prince Mohammed bin Salman, is focused on reducing Saudi Arabia’s dependence on oil and creating a diversified economy. It promotes investment in sectors like tourism, entertainment, and infrastructure. The construction industry plays a central role, serving as the backbone for mega-projects and urban development, fueling economic expansion.
Construction Industry at a Glance:
- Saudi Arabia’s construction market is currently valued at $64 billion and is expected to grow at a 5.8% CAGR through 2028.
- Saudi Arabia’s economy, with a GDP of SAR 2.4 trillion, is the largest in the Middle East.
- The construction sector, worth $65.58 billion in 2023, is projected to reach $75.12 billion by 2028, growing at a 2.75% CAGR.
- 70% of Saudi Arabia’s projects are in the construction sector, focusing on residential, cultural, leisure, and hospitality developments.
Top Construction Projects Under Vision 2030
Saudi Arabia is executing several world-class projects that are reshaping its urban landscape and drawing significant foreign investment:
- NEOM
A $500 billion futuristic mega-city, NEOM integrates sustainability, cutting-edge technology, and advanced infrastructure. Designed to attract global talent and businesses, NEOM symbolizes the future of urban living, positioning Saudi Arabia as a leader in global urban development. - Qiddiya
This massive entertainment city, set to be completed by 2035, spans 334 square kilometers and is expected to create 57,000 jobs by 2030. It will contribute SAR 17 billion to the economy, with over 2 million hotel guests and 12 million visitors benefiting from the commercial sector. - Residential Development
Vision 2030 also aims to increase homeownership from 62% in 2020 to 70% by 2030. The residential sector is booming with heavy investment in housing projects to meet this target.
Saudi Arabia as a MENA Leader in Construction
For the past four years, Saudi Arabia has been the strongest market in the MENA region, awarding the highest value of construction projects. The country’s pipeline for unawarded projects is estimated at $1.1 trillion, with $400 billion worth of projects already in the execution stage.
In addition:
- 56% of Saudi Arabian hotel rooms (around 35,884 rooms) are set to open in 2023, signaling a surge in the hospitality sector.
- The total value of projects awarded in Saudi Arabia between 2021 and 2025 is expected to reach $569 billion.
Sustainability and Innovation Driving Growth
Saudi Arabia’s construction sector is increasingly adopting green building practices to align with global sustainability goals. Vision 2030 emphasizes the use of eco-friendly materials and energy-efficient technologies to reduce the carbon footprint of new developments. The integration of Building Information Modeling (BIM), 3D printing, and smart construction methods is revolutionizing project execution, improving efficiency and quality.
Additionally, the government is increasing renewable energy capacity from 4.9 GW in 2021 to 27.3 GW by 2023 and aims to reach 58.7 GW by 2030.
A Bright Future for Saudi Construction
The future of Saudi Arabia’s construction industry is bright. With mega-projects, job creation, and sustainable practices driving growth, the sector will play a pivotal role in shaping the kingdom’s economy and society as it moves toward its Vision 2030 goals. Investors looking to tap into the MENA region should consider Saudi Arabia a prime destination, given its strong economic performance, $1.1 trillion project pipeline, and leadership in innovation and sustainability.
By 2030, the construction sector will not only reshape the country’s urban landscapes but also redefine its place on the global economic stage.