Saudi Arabia Construction Market: Mega Projects, Infrastructure Spending & Growth

According to IMARC Group's latest research publication, Saudi Arabia construction market size reached USD 101.4 Billion in 2025. Looking forward, IMARC Group estimates the market to reach USD 138.4 Billion by 2034, exhibiting a growth rate (CAGR) of 3.52% during 2026-2034.

How AI is Reshaping the Future of Saudi Arabia Construction Market

• Predictive Project Management: AI-powered tools optimize scheduling and resource allocation, with 60% of construction professionals integrating these systems. Projects like Qiddiya use real-time tracking and predictive maintenance to reduce delays.

• Smart Site Monitoring: Drones and computer vision systems compare progress against planned schedules, flagging deviations instantly. Edge AI enables insights even in remote zones with weak connectivity, crucial for mega-projects.

• Digital Twin Integration: Virtual replicas monitor equipment performance and predict maintenance needs proactively. Projects like NEOM and The Line rely on AI-driven digital twins to ensure optimal operation and infrastructure quality.

• Generative Design Tools: Engineers input constraints like cost and materials to receive thousands of optimized design options instantly, accelerating creativity while ensuring alignment with sustainability and regulatory mandates across major developments.

• Safety Enhancement Systems: AI analyzes site footage to detect violations in real-time, preventing incidents before they occur. viAct's plug-and-play systems help contractors protect thousands of workers across mega-projects without overhauling existing setups.

How Vision 2030 is Revolutionizing Saudi Arabia Construction Industry

Saudi Arabia's Vision 2030 is fundamentally transforming the construction sector by prioritizing economic diversification and reducing oil dependency. With over SAR 12 trillion (approximately USD 3.2 trillion) in planned investments, mega-projects like NEOM (USD 500 billion), Qiddiya, The Red Sea Project, and Jeddah Central are driving unprecedented demand for construction. These giga-projects generate significant employment opportunities, attract global partnerships, and position the Kingdom as an innovation hub. Vision 2030 targets increasing homeownership from 65.4% to 70% by 2030, requiring 115,000 annual housing units. Major initiatives include Sindalah island opening in 2024, and continued progress on infrastructure like the Riyadh Metro, which recently earned the Guinness Record as the world's longest driverless train. According to Knight Frank, contracts worth USD 215.4 billion were awarded between 2020-2025, with Riyadh accounting for 63% at USD 135.2 billion.

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Saudi Arabia Construction Market Trends & Drivers:

The market is experiencing remarkable momentum driven by government-led investments in mega infrastructure projects. With projects worth SAR 8 trillion (USD 2.1 trillion) in the pipeline over the next eight years, Saudi Arabia is positioning itself as one of the world's most important construction centers. Over 184,000 square meters of new retail developments focused on entertainment and lifestyle shopping are scheduled for completion, transforming Riyadh and Jeddah's retail landscape. The hotel development portfolio exceeds USD 110 billion, targeting approximately 310,000 hotel rooms by 2030, with 42,033 currently under construction. In 2025 alone, nearly SAR 109 billion (USD 29 billion) worth of projects were awarded through November, with July recording the highest monthly value exceeding SAR 33 billion. The construction sector accounted for 40% of awarded projects, highlighting its dominant role in economic transformation.

Housing development represents a critical growth driver, with rapid urbanization creating unprecedented demand across residential, commercial, and infrastructure sectors. Saudi Arabia's population of 37.5 million is growing at 1.43% annually, with 45% below 20 years old, creating sustained demand for modern housing. The Ministry of Housing has initiated large-scale programs, including a five-year USD 43 billion plan to construct 240,000 units across urban areas. Riyadh's residential stock reached 1.5 million units with 16,200 units delivered in the first half of 2024, while Jeddah's total stock hit 899,000 units. Despite this progress, over 115,000 housing units annually are needed until 2030 to meet demand. Government initiatives like the Sakani program have facilitated over 800,000 contracts, while the August 2025 tripartite agreement between REDF, NHC, and SNB will deliver over 40,000 housing units across 24 residential projects nationwide, supporting Vision 2030's homeownership targets.

Infrastructure modernization and transportation developments are accelerating construction activity across the Kingdom. Major investments in transport networks, including highways, railways, and airports, are enhancing regional connectivity and supporting economic diversification goals. The Riyadh Metro's 176km network with 85 stations exemplifies world-class infrastructure development. In May 2025, a USD 1.5 billion contract was awarded for a 57km high-speed rail connector linking NEOM's Oxagon industrial center. Saudi Arabia's National Water Company announced 15 sewage infrastructure projects worth over SAR 2.3 billion, including Jeddah's 14km Eastern Tunnel Project costing SAR 774 million. The Kingdom also leads in data center construction, with investments exceeding USD 14.9 billion announced at LEAP25, including major commitments from Google Cloud (USD 10 billion), Oracle (USD 1.5 billion), and AWS (USD 5.3 billion), supporting Saudi Arabia's emergence as a regional AI hub.

Saudi Arabia Construction Market Industry Segmentation:

The report has segmented the market into the following categories:

Sector Insights:

• Residential

• Commercial

• Industrial

• Infrastructure (Transportation)

• Energy and Utilities Construction

Regional Insights:

• Northern and Central Region

• Western Region

• Eastern Region

• Southern Region

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

Recent News and Developments in Saudi Arabia Construction Market

• February 2025: Saudi Arabia introduced Infra-guaranteed financing and surety bonds to assist contractors in the construction sector. Surety bonds operate similarly to insurance, offering guarantees to contractors and their clients, with insurance companies intervening to compensate for losses if issues arise during projects.

• August 2025: The Saudi Arabian government launched a tripartite agreement between the Real Estate Development Fund (REDF), the National Housing Company (NHC), and the Saudi National Bank (SNB) to deliver over 40,000 housing units across 24 residential projects nationwide.

• May 2025: Saudi Arabia's National Water Company (NWC) announced plans to award 15 sewage infrastructure projects worth over SAR 2.3 billion (USD 613.3 million) to enhance wastewater services and operational efficiency across the Kingdom.

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