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Saudi Arabia Construction 2021 - Trends, Opportunities, and Challenges in the Middle East's Biggest Construction Market - MEED Insights

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    Report

  • 105 Pages
  • September 2021
  • Region: Middle East, Saudi Arabia
  • GlobalData
  • ID: 5560020
1h Free Analyst Time
1h Free Analyst Time

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Bright outlook for Middle East’s biggest construction market

With about $920bn of construction and transport projects planned and about $58bn of construction contracts being tendered, Saudi Arabia is by far the Middle East’s biggest construction market, accounting for 54 percent of all construction and transport projects planned in the region.

Driven by Riyadh’s Vision 2030 national development agenda for the diversification and privatisation of the giant Saudi economy, which includes a raft of vast megaprojects such as the $500bn Neom future cities, Qiddiya entertainment city, and the Red Sea Project, the kingdom offers the region’s biggest pipeline of future construction opportunities.

Yet, even with such enormous potential, the Saudi construction market is facing many challenges as a result of the impact of the Covid-19. The kingdom’s construction industry has been severely hit by the impact of the pandemic with the pace of construction contract awards falling sharply in 2020 and 2021. According to the publisher, Saudi Arabia’s construction output contracted -1.9 per cent in 2020.

Impact of Covid-19

$13.4bn of construction and transport project contracts were awarded in Saudi Arabia in 2020, down 12.2 percent on the $15.3 of awards made in 2019, and 38 per cent less than the $18.5bn average annual value of awards since 2010.

The pace of awards has slowed further in 2021, with only $5.7bn-worth of construction and transport project contracts awarded in the first half of the year.

Nonetheless, with some $58.3bn of construction contracts being tendered at the end of June, the prospects are good for a rapid acceleration in the pace of awards in the remainder of 2021 and 2022.

These projects will deliver a rebound in the kingdom’s construction activity with construction output forecast to increase by 3.3 per cent in 2021.

Boosted by stimulus spending aimed at accelerating the post-Covid recovery, Saudi Arabia’s contractors, engineers and manufacturers can look forward to an increase in building and infrastructure projects in the coming two years. And while government support will stimulate activity in the near term, the long-range outlook is boosted by improving fiscal conditions as oil prices recover and output caps are eased.

In addition to its return to strong growth, the Saudi construction sector is also undergoing a dramatic transformation in the way that it operates. The kingdom’s Vision 2030 projects are being delivered by new generation of clients, whose focus is on the development of local capacity. Anybody seeking to work in Saudi Arabia must invest in local content.

At the same time, the growing use of public-private partnerships (PPPs) to deliver public services will see a new breed of private-sector clients for infrastructure projects. This will change relations between clients and their contractors and adds private-sector drive to the need to innovate and reduce waste.

Written by MEED, the Middle East market experts within the the publisher Group, "Saudi Arabia Construction 2021" is a comprehensive analysis of the key trends, opportunities and challenges facing the kingdom in 2021 and 2022. The report provides construction companies, contractors, suppliers, manufacturers and consultants with a powerful resource that will help them to identify new opportunities, set strategy, and mitigate risk in Saudi Arabia.

Reasons to Buy


  • The impact of Covid-19 on the Saudi construction industry
  • Outlook for construction opportunities in Saudi Arabia
  • New projects planned
  • New construction clients and their objectives
  • Localisation and in-country value
  • Energy transition and circular construction
  • Economic masterplans and national visions
  • Industry challenges - digital disruption, VAT, contracts, payments
  • Saudi Arabia’s Vision 2030
  • Saudi Megaprojects - Neom, Red Sea Project
  • PPP progress across the region

Table of Contents

1. Executive summary
2. Saudi Arabia construction market overview
2.1 Impact of Covid-19
2.2 Key trends
2.3 Megaprojects in Saudi Arabia
3. Project trends and pipeline
3.1 Construction
3.2 Transport
4. Vision 2030
4.1 Targets
4.2 Progress report
4.3 Privatisation and PPPs
4.4 National Transformation Programme (NTP)
5. Construction cash flow
5.1 Saudi Arabia construction cash flow
5.2 Saudi Arabia project activity monitor
5.3 Saudi Arabia construction market sustainability
6. Finance
6.1 Saudi Arabia budget 2021
6.2 Saudi Arabia government finances
6.3 Public Investment Fund (PIF)
6.4 Saudi Arabia banking sector
6.5 Saudi Arabia bank exposure to the construction sector
7. Sector analysis
7.1 Construction
7.2 Transport
8. Leading clients and contractors
8.1 Construction
8.2 Transport
List of Tables
Table 1: Largest construction and transport contract awards in 2020
Table 2: Major construction and transport projects on hold in Saudi Arabia
Table 3: Select construction projects awarded in Saudi Arabia in 2021 ($m)*
Table 4: Major construction projects due for award in 2021-22 ($m)
Table 5: Select transport projects awarded in Saudi Arabia in 2021 ($m)*
Table 6: Major transport projects due for award in 2021-22 ($m)
Table 7: Government budgets 2020-2021 (SRbn)
Table 8: Credit to the building & construction sector by Saudi banks
Table 9: Major real estate projects expected to be awarded in 2021
Table 10: The $68bn Saudi Housing Project - packages planned and underway
Table 11: Major tourism projects planned and underway in Saudi Arabia
Table 12: Major hospital projects planned and underway in Saudi Arabia
Table 13: Major unawarded education projects
Table 14: Major unawarded road projects
Table 15: North-South Railway projects planned and underway
Table 16: Major metro projects in Saudi Arabia
Table 17: Riyadh Metro projects planned and underway
Table 18: Mecca Metro packages
Table 19: Medina Metro Project
Table 20: Jeddah Metro phase 1
Table 21: Jeddah LRT and tramway: phase 1
Table 22: Jeddah Metro Project
Table 23: Major unawarded airport projects
Table 24: Port cargo throughput (tonnes), 2015-2020
Table 25: Container volume throughput (TEUs), 2015-2020
Table 26: Major port projects planned and underway
List of Figures
Fig 1: Saudi Arabia construction and transport project contract awards ($m), 2011-2021*
Fig 2: Saudi Arabia construction and transport awards 2011-2020 by subsector (%)
Fig 3: Planned but unawarded construction and transport projects in Saudi Arabia ($m)
Fig 4: Saudi Arabia construction contract awards by sector ($m), 2011-2020
Fig 5: Saudi construction contracts in pipeline by status (%)
Fig 6: Saudi construction contracts in pipeline by segment (%)
Fig 7: Saudi Arabia transport contract awards by sector ($m), 2011-2021*
Fig 8: Saudi transport contracts in pipeline by status (%)
Fig 9: Saudi transport contracts in pipeline by segment (%)
Fig 10: Saudi Arabia construction & transport cash flow, 2013-2020 ($bn)
Fig 11: Saudi Arabia construction & transport project activity monitor, 2011-2020 ($bn)
Fig 12: Saudi Arabia construction & transport market sustainability assessment
Fig 13: Saudi bank credit by sector, 2020 (SRbn)
Fig 14: Leading clients in real estate sector by value of work under execution ($m)
Fig 15: Leading contractors in real estate sector by value of work under execution ($m)
Fig 16: Leading clients in roads sector by value of work under execution ($m)
Fig 17: Leading contractors in roads sector by value of work under execution ($m)
Fig 18: Planned rail networks in Saudi Arabia to 2040
Fig 19: Riyadh Metro network
Fig 20: Mecca Metro
Fig 21: Jeddah transport masterplan
Fig 22: Leading clients in rail sector by value of work under execution ($m)
Fig 23: Leading contractors in rail sector by value of work under execution ($m)
Fig 24: Airport passenger numbers (millions), 2010-2020
Fig 25: Leading clients in aviation sector by value of work under execution ($m)
Fig 26: Leading contractors in aviation sector by value of work under execution ($m)
Fig 27: Leading clients in ports sector by value of work under execution ($m)
Fig 28: Leading contractors in ports sector by value of work under execution ($m)
Fig 29: Leading clients in the construction sector by value of work under execution ($m)
Fig 30: Leading contractors in the construction sector by value of work under execution ($m)
Fig 31: Leading clients in transport sector by value of work under execution ($m)
Fig 32: Leading contractors in transport sector by value of work under execution ($m)