Saudi Arabia’s construction sector remained strong in the first quarter of 2023 and posted a record reading on the back of higher workloads, a new survey by the Royal Institution of Chartered Surveyors has shown.
The headline Rics Construction Activity Index for Saudi Arabia in the three months to the end of March recorded a positive 69 net balance reading, up from the +65 recorded in the previous quarter.
“Construction workloads continue to post solidly positive readings, with infrastructure reporting an exceptional +86 net balance which is a record positive result since the Rics construction monitor began assessing Saudi Arabia in the third quarter of 2018,” Rics said in a statement.
“Workloads of private residential and private non-residential types also demonstrated very good results.”
However, like elsewhere in the world, skills shortages and the cost of materials are holding back the construction sector in the kingdom, it added.
“Looking to the future, 12-month workload expectations remain very strong with infrastructure expected to continue to lead the way in demand,” Rics said.
“All metrics considered, the Saudi construction sector, similar to its property sectors, remains one of the leading lights across the globe and will remain so for the foreseeable future.”
Saudi Arabia, the Arab world's largest economy, is building a number of new projects as it focuses on diversifying its economy away from oil. The projects span sectors including real estate, tourism, entertainment, infrastructure and others.
The UAE’s construction sector also remained firmly positive in the first quarter of this year, the survey results showed.
The top line CAI for the Emirates reported a net balance of +41, down a touch from the +49 reported in the previous quarter, but stronger than any prior reading, Rics said.
“Workloads in the private residential sector contribute the most overall to the positive picture (+51 net balance), while infrastructure workloads report a net balance of +45, and private non-residential projects a +29 reading,” it said.
“Crucially, the entire sector continues to report firmly positive readings for construction activity.
“Looking to the future, 12-month expectations remain high across each segment.”
