With billions of dollars invested in infrastructure, energy and housing projects in recent years, Saudi Arabia’s construction costs are in danger of accelerating in the future. According to local cement suppliers in Saudi Arabia, cement sales in the fourth quarter of last year increased by more than 12% compared with the same period last year.
The rise in construction costs in Saudi Arabia can be roughly divided into three parts: labor, technology, and building materials.
Saudi Arabia has long relied on foreign labor.There are a large number of foreign personnel from countries such as Pakistan, India, and Bangladesh on construction sites in Saudi Arabia. Due to the large scale of real estate development, the shortage of labor may continue to exist; On the other hand, due to Saudi Arabia’s environmental factors and the special nature of its buildings, there is an increasing demand for professionals in the fields of mechanical, electrical, plumbing, high-rise buildings, sports infrastructure engineering, and project management, resulting in rising costs.
Currie&Brown, a global project management consulting firm, has released a report stating that the rising prices of steel, cement, glass, aluminum, and air conditioning system components have collectively driven up the cost of building materials.
Doug McGillivray, Managing Director of Currie&Brown’s Southern Gulf region, stated that construction costs in Saudi Arabia may increase by 5% to 7% this year. He believes that not only Saudi Arabia, but also the construction industry in the United Arab Emirates is facing the same situation, with construction costs in the UAE possibly rising by 2% to 5%.
Riyadh is currently one of the cities with the highest construction costs in the region, with an average cost of $2600 per square meter, “said the Saudi regional head of Turner&Townsend, a global project management company.
On the one hand, after decades of development, China’s building materials industry has established a relatively complete industrial system and strong market competitiveness; On the other hand, China has introduced energy-saving, emission reduction, and environmental protection policies to promote green transformation and technological upgrading of enterprises. These are important assistance for Chinese enterprises to enter the Saudi building materials market.
