The construction industry in Saudi Arabia is projected to grow at a compound annual growth rate of 7.05% from 2016 to 2020. This is an increase from 6.35% in 2015, according to a report by Timetric.
The growth is a result of an increase in transport infrastructure investments, which include railway and airport.
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Titled ‘Construction in Saudi Arabia – Key Trends and Opportunities to 2020‘, the report details how a growing population is exerting pressure on the country’s existing transport facilities leading Arriyadh Development Authority (ADA) to take measures to tackle the issue in Riyadh.
The city’s population is expected to be 8.2 million in 2030, resulting in traffic congestions and demand for better transport facilities. Accordingly, authorities have launched the SAR85bn ($22.5bn) Riyadh metro project to construct six lines and 85 stations. The rapid transit project is expected to be completed by 2018.
Investments in other sectors such as healthcare, manufacturing plants, education facilities, energy, and housing projects are also expected to contribute to the growth of Saudi Arabia’s construction industry.
However, the report cautions against the risks imposed by the plummeting oil prices, budget deficits, conflict with Yemen, and an overall economic slowdown. The country’s growing focus on other sectors will help to shift dependency on oil and aid economic growth.
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