Saudi Arabia is poised to become the world's largest construction market by the end of 2028, with a projected construction output value of $181.5 billion across all sectors, according to a new report by global property consultancy Knight Frank.

The latest analysis from ‘Saudi Arabia Construction Landscape Review – H1 2024,’ revealed that the Kingdom's first half 2024 construction output value grew by 43.3 percent year-on-year to reach $141.5 billion across residential, institutional, infrastructure, industrial, energy and utilities and commercial sectors.

Mohamed Nabil, Regional Partner, Head of Project & Development Services, Knight Frank MENA, said contract awards in the construction sector accounted for 61 percent of the total value with transportation sector placed second at 33 percent, highlighting the significant investment being made in bolstering Riyadh’s transportation infrastructure as the population swells to a projected 10 million by 2030.

“Notably, 38 percent of the existing contract award value [of $141.5 billion] is accounted for by Riyadh Province, equating to $54 billion, followed by Mecca and Tabuk Provinces at $28.7 billion and $28.5 billion, respectively,” he noted.

Knight Frank’s analysis showed that the residential sector dominates the construction output value in the Kingdom, accounting for 31 percent ($ 43.5 billion) of the total output value in 2023 and projected to reach $56.9 billion by 2028. The energy and utilities sector follows closely in second place, with a value of $ 35.1 billion, which is forecast to increase to $ 46.5 billion by 2028.

Given the scale of development pipeline, the government is hoping to attract over $3 trillion in investments by 2030, a figure recently confirmed the Minister of Investment during the inaugural Sino-Gulf Cooperation for Industries and Investments Forum in China last month.

Since the launch of Saudi Arabia’s National Transformation Plan in 2016, the total budgeted value of real estate and infrastructure projects has surpassed $ 1.25 trillion, the report said, adding that the urban transformation underway reflects Vision 2030’s aim to deliver over 660,000 residential units, more than 320,000 hotel keys, over 5.3 million square metres (sqm) of retail space, and more than 6.1 million sqm of new office space by the end of the decade.

(Editing by Anoop Menon) (anoop.menon@lseg.com)

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