Saudi construction needs more clarity
23 May 2025
Commentary
Colin Foreman
Editor
Saudi Arabia’s construction market finds itself in a quandary in 2025.
The announcement of Vision 2030 in 2016 was followed by a steady stream of gigaproject launches and unprecedented media coverage of the Saudi construction market. The hype delivered, and as those projects moved on site, there were record levels of contract awards in 2023 and 2024.
During the first quarter of 2025, however, the finance ministry has confirmed a 19% drop in capital expenditure, and data from regional projects tracker MEED Projects shows that the total value of construction and transport contract awards was $17bn – a 50% drop when compared to the first quarter of 2024.
The drop in awards follows reports last year of a reprioritisation of projects in the kingdom. Although this process has been publicly mentioned by officials, details have not been communicated. The assumption is that event-related schemes such as those for Expo 2030 and the 2034 Fifa World Cup will be the top priority, but this has not been officially confirmed.
The air of uncertainty has left the construction industry unsure about which projects will move ahead, and this risk is either being priced into tender returns or is leading companies to sit on the sidelines until more clarity can be gained.
Saudi Arabia still offers a lot of opportunities for the construction sector, but for that potential to be fully realised against a backdrop of lower oil prices and budget cuts, it needs to function as efficiently and as effectively as possible. This will not be possible until the priority projects have been officially identified.
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