Construction Sector In Saudi Arabia

Construction Sector

The construction sector throughout the world is estimated to be the value of $ 10,388.6 billion by 2019. There are main drivers for the construction industry such as GDP growth, per capita high income, increasing of population, spending from the government, the availability of credit from banks, increasing of individual spending, civilization. The fast and strong growth of the economy for some countries, such as China and The Middle East, can help also to further increase for this industry. Moreover, political situations for nations have also a significant influence on all industries; stable nations encourage the local people and foreigners to invest their money in many sectors which at the end will improve the economic situation for those nations.

Saudi Arabia

Saudi Arabia is considered as the most of the important country of the Middle East and heart of Islamic World; it has a very promising construction market with many of supporting elements for success. The population of Saudi Arabia reached 30.8 million by end of 2014, according to data released by the Kingdom’s Central Department of Statistics and Information (CDSI). According to an analysis conducted by economics reporting unit of Al-Eqtisadiah newspaper, 67% of the population of Saudis and 33% are foreigners who are working in the construction sector. The Gross Domestic Product (GDP) of Saudi Arabia is 746.25 billion US dollars in 2014, while the per capita GDP is 24,323 US dollars. Saudi Arabia GDP from construction 8.470 billion US dollars in the third quarter of 2015. Saudi Arabia is top second oil producers in the world with 11.7 million barrel per day (CNN 2015).

Number of Vistors

The number of visitors to the two Holy Islamic cities (Makah & Madinah) in Saudi Arabia is around 12 million per year and they can clearly notice the booming in construction everywhere. However, there is the expectation that the growth in the construction industry will continue to rise in Saudi Arabia for next few years with an estimated value of SR 3.75 trillion. This includes infrastructure, transportation, education, health, and utilities in order to encourage the private and foreign investments. To make this happen, the Saudi’s government have allocated the biggest budget in 2015 to infrastructure and transportation with the total value of SR 630 billion. Some of the key projects in Saudi Arabia are; Riyadh Metro, Dammam Rail, Makah Metro, Riyadh’s airport, and Jeddah’s airport, this is in addition to the renewal of the existing roads all over the kingdom of Saudi Arabia.


To manage such dynamic sector like construction sector with a budget more than some countries’ budget and dealing with more than 15 different nationalities working together in the same project in such a country like Saudi Arabia that have a very difficult weather and very special community culture, it needs clear strategy and effective strategic management, also this strategic management needs an adaption based on the country circumstances and market conditions.

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