Saudi construction sector stable: Study

A study by Proleads Global, an online research portal dedicated to construction projects in 19 countries, said Saudi Arabia's civil construction industry remains stable and has escaped the worst of the financial crisis.

The study "Insights Saudi Arabia: An Investigation into the Current and Future State of the Civil Building Construction Industry" examined more than 720 projects with a total budget of more than $430 billion (Dh1.5 trillion) across commercial and retail; education and healthcare; leisure and entertainment; and residential sectors.

The residential sector makes up the biggest share of the market in terms of value but education and healthcare has the most projects.

The study said cashflow in the Saudi Arabian industry grew throughout 2008 and stabilised in 2009.

"The market in Saudi Arabia is expected to maintain current levels throughout 2010, although slight decline is expected in the education and healthcare sectors countered with an expected slight growth in commercial and retail," said Emil Rademeyer, Director of Proleads Global.

According to the study, 2011 is set to see significant project completions.

Despite the global slowdown, Saudi Arabia is one of the most active construction markets in the world as it grows its infrastructure to meet domestic demands with more than 350 of the active projects in construction.

"The economic crisis has not had a great effect on the rate at which projects have been cancelled in Saudi Arabia," said Rademeyer.

"Our cashflow projections show the Saudi Arabian industry will continue building from a position of strength well into 2010, whereas other Gulf markets continue to seek stability," he added.

Less than 80 active projects, with a total value of around $20bn were placed on hold or cancelled in Saudi Arabia. This is in marked contrast with the UAE, where a similar study recently found 400 cancelled or on hold projects valued at more than $300bn.

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