PROJECTS: Saudi construction activity to remain strong in 2024: report

Staff Writer

Saudi Arabia’s construction sector has recorded high growth over the past two years, and it will remain strong in 2024 as it benefits from rising public capital expenditure, according to a Saudi market research think-tank.

The construction sector, which accounts for nearly 9.2 percent of non-oil GDP, saw another solid rate of growth in the year to third quarter of 2023, though at 3.9 percent this was markedly softer than the 8.8 percent registered in the same period of 2022, the Riyadh-based Jadwa Investments said in a report sent to Zawya Projects on Wednesday.

“As has been the case for the past few years, much of this growth came from project spending, primarily giga-projects,” it said.

The report, citing international data, estimated the value of total projects either completed or in execution in 2023 at $60 billion, up from $44 billion in 2022.

For 2024 and beyond, growth in this sector will be mainly supported by several giga-projects in the Kingdom, including Neom, Red Sea, Roshn, Qiddiya and Diriyah, all of which saw varying rates of progress during 2023, Jadwa said in its report on the Saudi economic prospects in 2024.

“Moreover, the sector will continue to benefit from the rise in government capital expenditure, which we see rising to 93 billion Saudi riyals ($51.5 billion) in 2024 from SAR186 ($49.6 billion) in 2023 and SAR143 billion ($38.1 billion) in 2022,” it said.

“As highlighted in the recent budget statement, the annual rise in capital expenditure stems from the government’s plan to move forward with spending on mega-projects, growing sectors such as tourism, manufacturing and mining, and other infrastructure projects around the Kingdom.”

According to the report, the construction surged by around 8.7 percent in 2022 but growth eased to nearly 3.9 percent in 2023 and is expected to rebound to 5.5 percent in 2024.

(Writing by Nadim Kawach; Editing by Anoop Menon)


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