Saudi Arabia’s Construction Sector Booms with $1.7tn Project Pipeline

Saudi Arabia - September 16, 2025 -Saudi Arabia’s construction sector is entering a period of rapid acceleration, fueled by the ambitious goals of Vision 2030. According to a recent Turner & Townsend KSA Market Intelligence 2025 report, the Kingdom currently has a pipeline of approximately USD 1.7 trillion in real estate, infrastructure, and industrial projects under planning or development. Despite cost pressures, labour constraints and rising material costs, the sector is proving remarkably resilient.

Key Drivers and Sectors

- Giga-projects & Vision 2030: Major flagship initiatives are central to the surge. These include tourism, hospitality, mixed-use destinations, sports, leisure, and infrastructure mega-projects. - Industrial, Logistics & Digital Infrastructure: Growth in e-commerce, logistics, and data centres are also strong contributors. These sectors are being underpinned by national programmes such as the National Industrial Development & Logistics Program (NIDLP) and AI-company initiatives. - Residential and Housing: Housing remains a core pillar. Programmes like Sakani, which aim to achieve 70% homeownership by 2030, are accelerating residential development across the Kingdom.

Challenges and Adaptations

While the pipeline is huge, there are undeniable obstacles:

• High build costs: In Riyadh for example, build costs are now among the highest in the region at about USD 3,112 per square metre.
• Labour shortages & material costs: These are increasing lead times and squeezing margins.
• Procurement delays: Global and local supply chain pressures are affecting timelines.

To counter these, many developers and contractors are turning to:

• Digital delivery platforms to streamline cost, project management, and efficiency.
• Programme Management Consultancy (PMC) models, offering portfolio-level oversight, stronger governance, and alignment across multiple projects.
• Localising supply chains and upskilling the workforce to build long-term capacity.

Regional Implications and Investor Confidence

Saudi Arabia’s rapid growth in construction not only supports domestic development but also significantly strengthens its position as an appealing market for international investment. The wide variety of sectors, from tourism and leisure to digital infrastructure and housing, offer diverse entry points for investors.

Turner & Townsend notes that investor confidence remains high, backed by policy reforms, regulatory stability, and strong demand across both private and public sectors.

The report suggests that the Kingdom is at a transformative inflection point. The success of this $1.7 trillion pipeline will depend heavily on maintaining momentum in:

• Efficiency of delivery
• Policy stability
• Addressing cost and supply chain issues

If these challenges are managed well, Saudi Arabia is positioned to realize much of the Vision 2030 promise: diversified economy, vibrant built environment, high homeownership rates, and world-class infrastructure.