Saudi real estate professionals revealed that the prices of contracting sector services are one of the most important reasons for the rise in construction costs, especially after the increase in real estate projects and the decrease in labor, some of whom left the country after the end of the corrective period imposed by the Ministry of Labor at the end of last Hijri year, through which it sought to regulate the labor market again, but the contracting sector was one of the most affected real estate sectors, as the market is increasingly suffering from a weak injection of labor in the construction sector, which created a large gap in supply accompanied by a high value of contracting companies services.

Interested parties estimated the rate of increase in the wages of contracting companies and labor since the beginning of the last Hijri year {the last date for the correction of labor status} to more than 20 percent, and you need to wait to win their services because the majority of companies and institutions are committed to prior contracts, most of which are medium and small enterprises that contribute to the construction of more than 75 percent of the total real estate projects, which means that early booking is very necessary to ensure access to the services of contracting companies, which live a golden period in making profits, in light of the decrease in the number of skilled contracting companies and the decrease in the number of workers specialized in construction, which learns here Abdullah Al-Sakirin, who owns a private construction company, said that there is a demand that exceeds the capacity of contracting companies by many times, as the urban growth in the country has never been accompanied by any growth in the rate of attracting skilled and specialized labor, which made the pressure on them great, indicating that this demand that exceeds the supply by stages is not healthy at all, as a result of the rush to complete the projects they are linked to. Most companies rush to complete the projects with which they are bound by contract in order to undertake new projects, which is clearly reflected in the overall quality of the facility, which is what the real estate sector is experiencing, which complains about the weakness of contracting companies that receive huge works beyond their capacity, which casts a negative shadow on the entire real estate movement through low quality.
Regarding the impact of the shortage of skilled labor on the construction sectors, especially for residential projects, Al-Sakirin pointed out that this has serious repercussions, unless the situation is remedied by injecting double numbers of specialized and experienced workers in the market, who can receive the project as a vacant land and deliver a fully equipped building, indicating that the preoccupation and lack of specialists opens the way for beginners and ignorant people to lead the real estate sector, in medium and small enterprises This is clearly reflected in the poor infrastructure and home issues, which have only recently emerged, indicating that some have become very apprehensive when they intend to build a residential project due to their fear of the performance of labor and its future impact on the cohesion of the house in light of the spread of construction errors and the poor level of companies in the field of quality.
Badr Al-Khudair, who runs Al-Khudair Real Estate Consultancy, said that the real estate depends on the construction sector as the main engine of the real estate movement, and it was necessary to exempt some sectors from the corrective period and extend it, which reflects on the public interest by stabilizing the wages of construction workers when they are present in large numbers, which did not happen now, but the corrective period confused real estate companies and caused projects to falter and the overall cost of construction. Al-Khudair added that what worries them the most when receiving construction projects is the search for trained labor, in light of the succession of offers and advantages for this type of labor, which began to impose prices outside the limits of the familiar as a result of the high demand, compared to the low numbers of specialized workers that abound in the Saudi market, which is directly reflected in raising the prices of construction costs to about 5 percent of the general construction bill, and more than 20 percent compared to what they were paid before the beginning of the current Hijri year. It is worth noting that Saudi Arabia has been suffering from a shortage of skilled labor for several years, but this shortage may increase during the coming period, especially since a large group of companies did not have time to correct the status of their workers, which reflected the absence of a significant segment of workers, which reflected a clear gap in the numbers of these workers The construction sector in Saudi Arabia is witnessing an increasing demand in a country that is living a golden age in the construction sector, in light of the announcement of major projects that increase the demand for labor, but the market was and still suffers from the lack of qualified skilled labor.
On the same subject, Khalid Al-Qahtani, an investor in the construction sector, revealed that more than 75% of the projects in Saudi Arabia were carried out by small and medium-sized enterprises, which means that their presence on the real estate map is very important, but they must be developed and provided with skilled labor, especially since most of these companies recruit workers and then train and educate them, and after they imbibe the work, they go to neighboring countries to look for work contracts with more advantages. He predicted that the sector will witness a possible slowdown in construction operations in Saudi Arabia as a result of the scarcity of labor, which has become evident to those interested in the sector, pointing out that those who resort to large companies are owners of large or governmental projects, and some small and medium-sized companies make alliances to win some major projects through subcontracts, which reflects their importance on the real estate map, which requires support to facilitate their affairs.
He added that people are unable to afford the increasing labor expenses, as a result of the preoccupation of the remaining few with projects that they had already signed contracts months before the decision was issued, pointing out that even those who have the money to build will have to wait a long time to find the appropriate labor that is not tied to a contract, or that its contract is about to expire, revealing that the future is now for contracting companies that will top the list of the most demanding companies and work, and construction companies are one of the most dynamic commercial activities, and undisputedly top the active real estate branches. It is noteworthy that there has been an increase in the number of small and medium enterprises in Saudi Arabia during the past years, reaching 1.3 million establishments last year, while the number of active and active establishments amounted to 71 percent, and 29 percent of them are closed and inactive, and the number of individual establishments out of the total operating establishments reached 688 thousand, about 85 percent of the total operating establishments, Riyadh accounted for 25 percent of small and medium enterprises.

(Middle East)