The general contracting sector in Saudi Arabia is witnessing tangible growth during 2025 despite the wave of volatility in global markets, driven by the momentum of infrastructure projects and Vision 2030 programs, as a recent economic report on the construction sector in the Kingdom expects the market size to reach 232.14 billion riyals during 2025, an increase of 6.2% compared to 2024, which reflects the continued investment momentum in construction and urban development projects.
Recent economic report on the Kingdom's construction sector expects the market size to reach 232.14 billion riyals during 2025, an increase of 6.2% compared to 2024, reflecting the continued investment momentum in construction and urban development projects.
Rising construction costs... direct pressure on businesses
<A report issued by the General Authority for Statistics (GASTAT) showed that the Construction Cost Index (CCI) increased by 1.1% during June 2025 compared to the same period of the previous year, with construction costs for October 2025 increasing by 1.0% year-on-year, due to several key factors, most notably the increase in energy prices by 9.9% after adjusting diesel prices, with equipment and machinery rentals increasing by 2.5%, as well as labor wages increasing by 2.4%, while some construction materials recorded relative stability, which is directly reflected in implementation plans, schedules and budget estimates, according to the Statistics Authority report.
Expansion of classified companies... more intense competition
The contracting sector is witnessing a remarkable expansion in the base of companies, as the Saudi Contractors Authority confirms that the number of "Grade A" companies doubled from about 800 companies at the beginning of 2024 to about 1600 companies by the end of the same year, with the trend continuing to rise during the first half of 2025, reflecting the increasing desire of investors and developers to enter the market, especially with the high volume of government and private projects in the fields of housing, infrastructure, and smart city projects.
The number of companies in the construction sector is increasing, especially with the increase in the size of government and private projects in the fields of housing, infrastructure, and smart city projects.
Vision 2030 continues to drive the market
The contracting sector continues to be at the center of the Kingdom's economic transformation, with mega-projects being implemented in the Kingdom being the main driver of demand for contracting companies, and it is estimated that the volume of projects under implementation in the Kingdom exceeded 587 billion dollars during 2024, with continued growth until mid-2025.
Review 2030 continues to drive the market.
3,800 new contracting licenses were added during 2024, bringing the total number of licensed companies in the Kingdom's contracting sector to 8,900, according to the Saudi Ministry of Investment in 2025.
The head of the Saudi Contractors Authority (SCA) noted that the base of registered contractors has expanded in recent years, with the number of registered contractors increasing to more than 18,000, including about 1,200 international contractors. While the head of the Saudi Contractors Authority (SCA) noted that the number of registered contractors has increased to more than 18,000, including about 1,200 international contractors.
Rise in the number of construction companies and registration of new licenses
Expanding demand with mega projects and link to Vision 2030
The demand for contractors working on infrastructure, housing and mega projects linked to Vision 2030 is expected to continue, especially with the launch of mega projects in a number of sectors including transportation, entertainment, housing and tourism.
Demand for contractors working on infrastructure, housing and mega projects linked to Vision 2030 is expected to continue to expand.
