Construction Week reported that Infrastructure projects are playing a significant role in the continued growth of the Saudi construction industry.



The Saudi Arabia Infrastructure Report Q4 2009 revises BMIs previous forecasts for the country with an expected real growth of 2.86% YoY in the construction industry to reach a value of SAR 78.71 billion by 2014.

Mr Mike King author of the report said that Saudi Arabia stands apart from many of its regional peers as demand for infrastructure and construction projects is fuelled by domestic demand, as opposed to tourism or international demand and thus is still evident during the global downturn.

Mr King said that utilities in particular were driving construction with the most activity over the last quarter. The government approved the Medina power and water plant and the tender for a 2,000 MW independent power project in Riyadh was launched. A contract was awarded to KEPCO for the Rabigh IWPP. Regionally, the Phase I of the GCC power grid was completed signifying the linking of the power grids of Saudi Arabia, Kuwait, Bahrain and Qatar.

He said that The forecasts in real terms are dampened to an extent due to high levels of inflation in the country over the short term. Despite this activity is still down on previous years with financing remaining hard to come by and demand in residential and commercial construction far reduced.