RIYADH - The construction sector in Saudi Arabia remains robust despite facing some challenges from rising inflation and global economic uncertainties.
A new report from real estate firm JLL reveals that Saudi Arabia has the largest construction project pipeline in the Middle East and North Africa region worth $1.5 trillion. This accounts for 39 percent of the total $3.9 trillion MENA construction pipeline.
Most of Saudi’s pipeline is in the building and infrastructure sectors.
The Kingdom is continuing to see strong growth driven by its Vision 2030 reforms to diversify the economy away from oil.
According to the report, construction activity was up in the fourth quarter of 2023 with higher indexes recorded.
Non-oil sectors now contribute half of Saudi’s GDP compared to one third from oil. Tourism brought in $66 billion in revenue last year. Leisure and hospitality made up 23 percent of projects awarded in the first quarter.
While challenges like inflation, labour shortages and higher material costs were noted, Riyad Bank still sees positive domestic demand conditions. Its Purchasing Managers’ Index fell slightly to 57.0 in March but remains in expansion.
