Despite challenges such as labour shortages, rising material costs, and long procurement lead times, Saudi Arabia's construction sector is showing resilience and initiatives to localise supply chains, upskill the workforce and encourage modern methods of construction are helping to build long-term capacity, a report said.

 

Saudi Arabia’s construction sector is accelerating rapidly, underpinned by giga-project investments, economic diversification, and the national ambition of Vision 2030, according to global professional services company, Turner & Townsend.

 

The firm’s KSA Market Intelligence 2025 report analyses how the Kingdom is capitalising on a $1.7 trillion pipeline of real estate, infrastructure and industrial developments, while navigating associated delivery pressures and capacity constraints. 

 

Investing digital tools

Digital delivery is also gaining traction. Turner & Townsend’s Global Construction Market Intelligence (GCMI) report found the majority of clients in KSA are now investing in digital tools to streamline delivery, reduce costs and address workforce limitations. Alternative delivery models such as Programme Management Consultancy (PMC) are also being adopted to improve project outcomes and ensure the Kingdom’s ambitious programmes are deliverable. Unlike traditional approaches, PMC offers strategic, portfolio-level oversight by integrating governance, stakeholder alignment and digital platforms across multiple workstreams to drive consistency, efficiency and long-term value.

 

According to the GCMI, build costs remain elevated. Riyadh is now one of the most expensive cities in the region at $3,112 per sq m - yet investor confidence remains strong. Tourism, logistics, digital infrastructure and residential development are attracting the greatest share of investment.

 

Mixed-use destinations, sports, leisure and hospitality are among the top-performing sectors – fuelled by mega-events such as Expo 2030 and the FIFA World Cup 2034™. Industrial growth is gaining momentum, particularly boosted by thriving logistics, e-commerce, and data centre capacity, and further underpinned by national programmes such as NIDLP, and the launch of HUMAIN, a PIF-owned artificial intelligence company. Meanwhile, initiatives such as ‘Sakani,’ aimed at achieving 70 percent homeownership by 2030, are boosting residential construction and positioning housing as a key pillar of Vision 2030.

 

Kobus Havemann, Director at Turner & Townsend in the Middle East, said: “Saudi Arabia’s economy is projected to be the second fastest growing in the world this year.1 The knock-on-effect is its construction sector is at a transformative inflection point. Giga-projects are reshaping the landscape, while infrastructure, housing and digital platforms are converging to deliver the ambitions of Vision 2030.

 

“While cost and capacity pressures persist, the market is showing agility with contractors embracing new technologies, international partnerships growing, and policy reform supporting investment confidence. The focus now must be on capability-building, delivery excellence, and sustainable progress.” -TradeArabia News Service