• In the wake of low oil prices, Saudi Arabian Government is focusing on the development of a robust construction industry to reach the projected economic growth figures.
• Increased spending in infrastructural projects in areas such as transport, healthcare, housing, energy, manufacturing units and education will help the government overcome the budget deficit and meet the expected investment targets of USD 224.0 billion, as defined in the 2016 budget.
Ken Research announced its latest publication on, “Construction in Saudi Arabia – Key Trends and Opportunities to 2020”, provides a comprehensive analysis of the construction industry in Saudi Arabia. The publication cover construction output and value-add methods to arrive at historical (2011-2015) and forecast (2016-2020) valuations of the industry. It also offers a detailed segmentation of projects by sector, including a further breakdown of each project’s value by type of activities and costs involved. Additionally, it describes the opportunities and risks associated with different projects and also offers critical insight on the impact of current trends on industry participants.
Since oil prices continue to fall, the Saudi Arabian government is exploring new means of increasing revenues while cutting down on public expenditure. The global stagnation of oil prices has forced the government to reduce its budget spending in 2016. In order to compensate, the Government plans to cut subsidies and increase taxes and domestic fuel prices. This will ensure that the budget deficit is levelled without affecting the key economic development projects.
These projects primarily belong to the construction industry. Firstly, Saudi Arabia is making hefty investments in constructing a large number of housing units to combat the acute housing shortage in the country. According to the Saudi Arabian housing ministry, an estimated 3.0 million houses have to be built by 2025 to address this shortage. Another area that the government is actively investing in is airport infrastructure. In a bid to capitalize on the growing number of pilgrims visiting the country every year, The General Authority of Civil Aviation (GACA) in Saudi Arabia is focusing on both new airport development projects as well as enhancement of existing airport facilities. The government’s move to privatize airports by 2020 is another factor driving growth in Saudi Arabia’s aviation industry. Additionally, the government is working with the Arriyadh Development Authority (ADA) to improve rail and road infrastructure in Riyadh, the country’s capital, and thus fulfill the needs of the expanding urban population. For instance, the ambitious Riyadh Metro Line project is slated to be completed by 2018.
The Global Construction Industry
The global construction industry is witnessing significant shifts in both the manner in which business is conducted, as well as in the volume of investments being made. With the emergence of multiple centers of economic power across the globe, construction projects are being given priority, and are rapidly driving infrastructure-led growth. Traditional business models within the construction industry are being challenged, and companies are fast embracing automated and innovative solutions.
Some primary factors governing the key issues and trends of the global construction industry include:
• Increasing globalization led by advancement in technology
• Emergence of new non-traditional business models which encourage greater participation
Key Topics Covered in the Report:
– Sector wise construction industry outlook including commercial construction, industrial construction, infrastructure construction, institutional construction, energy and utilities construction and residential construction
– Market data analysis based on type of project, cost and activity
– Detailed profiles of five major construction companies in Saudi Arabia
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Ankur Gupta, Head Marketing & Communications