Saudi Arabia's construction engineering market is ushering in explosive growth, with a scale expected to exceed one trillion yuan, becoming a new focus of competition in the global construction industry. Against the backdrop of increasingly saturated traditional markets such as Europe and the United States, the blue ocean market in the Middle East, especially Saudi Arabia, is attracting the attention of Chinese companies and global construction giants.

The strong growth of the Saudi construction market is not accidental, but a result driven by multiple factors. The country's "Vision 2030" plan clearly states that more than US$500 billion will be invested in infrastructure construction in the next ten years, covering super projects such as NEOM Future City, Red Sea Project, and Riyadh New City. Authoritative agencies predict that the size of Saudi Arabia's construction engineering market will soar from about 800 billion Saudi riyals in 2024 to more than 1.5 trillion in 2033, with an annual compound growth rate of up to 8.5%. The increased policy support, the accelerated urbanization process, the younger population structure and the diversified economic transformation demand constitute the core driving force for market growth. With its strategic position and strong financial strength to connect Asia, Africa and Europe, Saudi Arabia has become a regional infrastructure investment hub, and its infrastructure investment accounts for 15% of GDP, far exceeding the global average. At the same time, the demand for urbanization promoted by "Vision 2030" has accelerated infrastructure upgrades and construction industry transformation. In addition, super engineering technology requirements are high, long cycles and large investments have attracted many international contractors to participate. Data shows that the number of Saudi Arabia under construction is expected to reach 1,200 in 2024, an increase of 65% from 2019; Deloitte Consulting predicts that the country's infrastructure investment penetration rate will reach 20% by 2027, and will grow steadily in the future.

Huge development opportunities make Saudi Arabia a "must-fight place" for global construction giants. Supported by the Saudi royal family, Saudi Binladin Group, the largest local construction group, has more than 70 years of experience in the Middle East construction. It has undertaken landmark projects such as the expansion of the Mecca Mosque and the King's Tower of Riyadh. It has significant advantages in the fields of super high-rise buildings, religious buildings and infrastructure. It has its own logistics and supply chain system, a complete project management model and more than 500 offline partners, supporting the "integrated design and construction" service. The newly signed contract amount in the first half of this year reached 18 billion Saudi riyals, accounting for 68% of the government project orders.

As one of the most active international contractors in Saudi Arabia, China Construction has established a subsidiary in 2016 and has continued to deepen its efforts after undertaking the Riyadh subway project. A new construction base of 500,000 square meters was established in Riyadh in 2023. In 2024, an investment of US$1.5 billion was announced to establish a regional headquarters and training center, which not only improves construction efficiency and technological innovation, but also cultivates professional talents for the local area. In March this year, China Construction successfully won the bid for the construction contract for the core area of the NEOM project, with an amount of over US$5 billion. While expanding its influence with "technology leadership", it also intensified market competition.

European construction giants are also actively making plans. France's Wanxi plans to invest 2 billion euros to build a regional manufacturing base to strengthen local operations and government cooperation. Its "European standard localization" model helps to add 50% of new contract orders within 6 months. The monthly completion projects during Ramadan last year soared by 85%, and construction efficiency and customer satisfaction significantly improved; Germany's Hauchtif set up a Middle East headquarters in Riyadh, focusing on the expansion of Saudi Arabia and surrounding markets. In addition, Asian companies such as South Korea's Hyundai Construction and Japan's Daseong Construction have also entered Saudi Arabia to test cooperation models in the fields of energy and transportation, and will further expand into other professional fields this year.、

Although the Saudi construction market has huge stock space and future opportunities are promising, enterprises also need to face up to challenges such as qualification certification and localized employment, and make compliance and localization strategies. At present, Chinese-funded enterprises can enter the market through three major paths: the establishment of wholly foreign-owned enterprises is suitable for large enterprises with long-term layout and strong funds, and must be approved by the Saudi Investment Department, the Federation of Commerce and Industry, the Contractor Administration and other departments; the process of establishing a branch is simplified, suitable for enterprises that carry out limited projects in the short term or medium term, authorized by the parent company, with controllable risks and less investment; direct contracting of a single project is the best choice for professional enterprises with unique technical advantages to quickly test the waters, just obtain a temporary construction permit and set up a project office.

Saudi Arabia implements a strict five-level contractor hierarchy system, from the first level (unlimited super-large projects, capital ≥100 million Saudi Riyals) to the fifth level (micro-scale projects). Each level corresponds to different capital requirements, project performance and technical personnel allocation, and enterprises need to accurately position according to their own situation. In the future, whoever can solve the existing market problems more efficiently will be able to gain an advantage in the competition in the Saudi construction market.(This article is from the official website of Jiandao www.seetao.com it must not be reprinted without permission, otherwise it will be investigated, please indicate the reprint of Jiandao.com + original link) See the Middle East column editor/Gao Xue