BMI's Executive Summary

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With a shift in focus towards the expansion of the non-oil economy, Saudi Arabia has outlined ambitious plans to develop its manufacturing, communication and construction sectors. Projects worth approximately US$300bn are being undertaken, nearly all of which have an element of construction in them. Buoyed by high demand, the Saudi construction industry has been contributing in excess of 5% to the country's gross domestic production (GDP) in the last few yearsThis report forecasts the Saudi construction industry to log an average growth of 5.20% over 2008-12.

Saudi Arabia represents the largest construction market in the Middle East. In recent years, large oil revenues have made it possible for the construction industry to employ the extra liquidity for its development. The 2007 Saudi budget envisages more than US$50bn of investment in various construction-related activities. The growth of the country's construction industry is also sustained by the government's efforts to liberalise the economy. Provision for total ownership of property and projects by foreign nationals, together with relaxation of taxation norms for foreign companies who are allowed to participate in the public procurement system, has ensured attractive capital flows into the nation. At present, the focus of the construction industry is on the development of mega cities including King Abdullah Economic city and Knowledge Economic city (KEC).

Despite the remarkable growth of the Saudi construction industry, it needs to be wary of rising inflation, brought about by excess liquidity in the market via persistent budget surpluses. Political instability and the threat of terrorism also pose challenges for the construction industry.

The nation continues to remain an attractive destination for foreign investment in spite of macroeconomic challenges faced by its economy. Its construction industry is poised to perform impressively in the forecast period, thanks to the government's fervent efforts. Accordingly, BMI forecasts the Saudi Arabian construction industry to register 4.75% year-on-year (y-o-y) growth in 2008 and to be valued at US$25.46bn by 2012.

Contents

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Chapter 1 – Industry Trends And Developments

Market Overview

Saudi Arabia's Economy In 2006–2007

Saudi Arabia's Construction Industry In 2006–2007

Major Companies

Some Recent Investment Initiatives

Chapter 2 – Key Projects

Transport

Utilities

Tourism

Cement And Steel Production

Residential And Commercial Construction

Table: Saudi Arabia — Major Infrastructure Projects

Chapter 3 – Business Environment

Introduction

Table: Middle East/Africa Business Attractiveness Rankings

Business Attractiveness Rankings — Methodology

Middle East And Africa Region

Saudi Arabia Business Environment Ranking

Economics — Long–Term Risk

Politics — Long–Term Risk

Construction Growth

Competitive Environment

Anticipated Potential

Chapter 4 – SWOT Analysis

Saudi Arabia Infrastructure Industry SWOT

Saudi Arabia Economic SWOT

Saudi Arabia Political SWOT

Saudi Arabia Business Environment SWOT

Chapter 5 – Industry Forecast Scenario

Table: Saudi Arabia — Construction Industry Forecast

Risks

Chapter 6 – Macroeconomic Outlook

Still Confident On Growth Outlook

The SASI Decline — A Technical Issue

Risks To Scenario

Table: Economic Activity

Chapter 7 – Competitive Landscape

Key Players — Saudi Construction Industry

Chapter 8 – Company Monitor

Saudi Oger

Al Khodari Group

ABB Saudi Arabia

Almabani General Contractors

Chapter 9 – BMI Forecast Modelling

How We Generate Our Industry Forecasts

Construction Industry

Sources

Competitive Landscape for Middle East & Africa Infrastructure Reports: Sample of Companies Ranked

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Comparative company analyses and rankings by sales, % market share, employees, registration date and ownership structure. Company profiles include fully researched senior executives and contact details, business activity and leading products and services. SWOT (strengths, weaknesses, opportunities, threats) of the state’s business environment, infrastructure sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of Middle Eastern & African Infrastructure Sources

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BMI's Middle Eastern & African Infrastructure Reports are based on an extensive network of multilateral organisations, government departments, Infrastructure industry associations, chambers of commerce and company reports. Information sources include: