Major projects include the Red Sea International Airport and Railway Tunnel which can be instrumental in growing its economy. This will create a huge demand for transportation construction companies, with the market expected to grow at CAGR of more than 5% during the forecast period.
The COVID-19 had a meager impact on the Saudi Arabia construction sector in 2020, contracted by 0.9%, this Pandemic did not affect the transportation infrastructure construction market, as continuous investments were implemented by Saudi Arabian government.
Saudi Arabia’s Vision 2030, along with a significant investment in housing and infrastructure development promoted across the country by local authorities, is revitalizing the transportation construction industry and generating interest in a growing number of international players.
The economy here is more diversified than in other GCC countries and strong government initiatives to invest in major construction projects are driving the sector. Private contractors have benefitted from the expansion and construction projects with the government’s Economic Vision 2030 plan in sight.
The Saudi government, with the Saudi Vision 2030, is actively looking into reforming the governance structures and regulations and heading toward opening a path for market liberalization and private-sector participation. The government is planning to become more open to issuing licenses for full-fledged foreign transportation infrastructure construction businesses.
A Thriving Economy: This pillar has achieved the 2030 target for women’s participation in the workforce in 2020. Additionally, the assets of the Public Investment Fund have grown significantly, and the contribution of SMEs to the GDP has increased.
Growth of Urban Population
The rapid growth of continuing urbanization is a major driver of transportation infrastructure investment. As per the World Bank, in 2020 the world population reached 34.8 million
In 2020, urban population accounted for 84% and expected to reach 92% by 2035. As the share of the urban population continuous to grows, the growth of transport infrastructure is also required to connect them in the urban areas in Saudi Arabia.
Companies could use latest and emerging technology to improve public services (such as mobility and well-being), interact more effectively with people, boost productivity, and solve environmental and sustainability issues.
The market in Saudi Arabia is fiercely competitive and fragmented with many international and domestic companies. International companies are partnering with local players to form joint ventures. This provides an opportunity for local players to exploit the global network of international companies.