The contracting sector in Saudi Arabia is witnessing an unprecedented phase of expansion that reflects the depth of the economic transformation led by “Vision 2030”, as the sector has become one of the main drivers of non-oil growth in the Kingdom, driven by a huge package of infrastructure projects, new cities and megaprojects. The sector's growth is supported by accelerated implementation and high levels of government and private spending, making the contracting market poised to become one of the world's fastest growing markets in the coming years.
Vision 2030 is re-engineering the sector
Chairman of the Saudi Contractors Authority Mohammed bin Abdulaziz Al Ajlan believes that the contracting sector has become a key partner in implementing the objectives of Vision 2030, noting that mega projects such as Neom, Qiddiya, Diriyah, Red Sea and Roshan have reshaped the market structure and created unprecedented opportunities.
Al Ajlan explained that the size of the contracting sector in Saudi Arabia exceeded one trillion riyals, with about 200 thousand contracting companies operating within the local market.<He also pointed out that 8 key sectors have been directly affected by the vision projects, including education, real estate, energy, utilities, healthcare, manufacturing, transportation, logistics, tourism, entertainment and hospitality, which has boosted demand for construction services extensively.
The growth of the contracting sector is closely linked to the expansion of the logistics sector, with road, port and airport projects being one of the main drivers of demand. Ajlan emphasizes that the significant development in logistics infrastructure reinforces Saudi Arabia's position as a regional investment center and opens the way for more construction projects in the coming years.
Saudi Arabia is on the cusp of becoming the world's largest construction market
Saudi Arabia is poised to be one of the largest construction markets in the world in the coming years, with a report by Knight Frank estimating that the construction market could reach $181. 5 billion by 2028, while the value of the construction market could reach $181.5 billion dollars by 2028, while the size of the sector grew by 4.3% annually to reach $141.5 billion in 2023.
McKinsey also predicted that annual spending on projects in the Kingdom will exceed $175 billion between 2025 and 2028, cementing its position as one of the fastest-growing construction markets globally. The Saudi contracting sector is expected to remain active over the next ten years, supported by the Kingdom's Vision 2030 projects or new projects for Expo 2030 or the 2034 Saudi Arabia World Cup.
McKinsey expects the Saudi contracting sector to remain active over the next ten years, supported by the Kingdom's Vision 2030 projects.
Boom in awards. 457% jump in one month
In an indication of the accelerated pace of activity, the value of projects awarded in Saudi Arabia during March 2026 increased by 457.1% compared to February, reaching 15.6 billion riyals from 2.8 billion riyals, according to the Saudi Contractors Association "Construction Sector Outlook" report.<The number of awarded projects increased by 175% to 11 projects compared to only 4 projects in February, reflecting the acceleration of the investment spending cycle in the sector within a short period.
According to the report, the building and construction sector accounted for the largest share of the total value with 9 projects worth 15.5 billion riyals, while the water and energy sector recorded two projects worth 150 million riyals. The projects were distributed among multiple sectors, including education worth SAR 3.975 billion, the commercial sector worth SAR 3.750 billion, an investment hotel worth SAR 2.497 billion, projects in sports and entertainment facilities worth SAR 2.478 billion, as well as projects in the hospital, buildings, public utilities and energy sectors.
Riyadh dominates the map of projects
The report of the Contractors Authority showed that the Riyadh region topped the scene in terms of value and number of projects, with a total of 9 projects worth 15.513 billion riyals representing about 82% of the total value, while Mecca recorded one project worth 99.75 million riyals, and Najran one project worth 50.25 million riyals. The report also predicted the delivery of 6 projects during 2032 worth more than 11.775 billion riyals, in addition to other projects to be delivered during 2026, 2027, 2028 and 2030, reflecting the extension of the project cycle in the medium and long term.
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