Saudi Arabia’s projects market is overheating. The volume of projects announced in the past six years vastly exceeds the resources that are available to work in the kingdom.
Combined with tight deadlines to complete projects as part of Vision 2030, the pressure on the construction industry to deliver is ratcheting up and turning the tables on the supply chain as the shift from a buyer’s to a seller’s market accelerates.
For the five years from 2016 to 2020, there was an average of about $14bn-worth of contract awards a year in Saudi Arabia for the construction and transport sectors. After rising to $21bn in 2021, the total rose to $32bn in 2022 – the second-best year on record.
The near doubling of the total annual value of contract awards by the end of 2022 has required a significant scale-up of resources in the kingdom, and the ramp-up is set to continue.
Much of this pressure is due to the five official gigaprojects, which are major programmes of work that will involve a sustained flow of contract awards for years to come. Read more in this month’s Agenda by MEED editor Colin Foreman.
The April 2023 issue of MEED Business Review also includes MEED’s 2023 construction contractor ranking.
Find out who the top 10 GCC contractors are here, and the top contractors by GCC country here.
Our 18-page special report on Saudi Arabia, meanwhile, highlights Riyadh’s progress in turning promises into reality.
While all eyes have been on Saudi Arabia’s Vision 2030 for some time, in the past 12 months the country’s gigaprojects have truly begun to gain momentum, with a surge in spending on infrastructure and associated projects.
We hope our valued subscribers enjoy the April 2023 issue of MEED Business Review.