Abstract
In time for the launch of BMI's infrastructure Q109 reports we have revised our construction data. The
data has been modified from 2008 onwards. This initiative stems from new methodology being
introduced in our forecasting method and aims to increase the relevance and reliability of BMI's
infrastructure data. BMI strives to be able to offer five year industry forecasts, however, some data sets
are currently available, but will be updated in time for our Q209 series of reports. BMI will therefore
make its predictions based on data sets for 2009-2012.
For 2009, BMI forecasts that Saudi Arabia's construction industry will be worth SAR82.17bn
(US$21.94bn). The sector is forecast to continue growing and we expect it to be worth approximately
SAR100.50bn (US$26.84bn) by 2012. We note that growth is estimated to have dipped in 2008 with the
sector growing by just 2.51%; however, we expect growth to pick up in 2009 with yearly growth of
3.14% forecast.
Saudi Arabia's construction sector makes up just a small percentage of the country's GDP but this is
forecast to increase. In 2009 the sector is predicted to account for 3.96% of GDP and by 2012 this will
have expanded to 4.87%. The number of workers in the sector is also expected to increase. In 2009 the
amount of people employed within Saudi Arabia's construction sector is predicted to stand at 1.07mn and
we forecast this to increase to 1.19mn in 2012, to make up 12.9% of Saudi Arabia's total work force.
BMI believes that the construction sector, not just domestically in Saudi Arabia, but worldwide will be
buffeted by the global economic downturn and will lead to investors tightening their belts, leaving less
money to go towards funding infrastructure related projects, especially those in the real estate sphere.
This could see a serious decline in the number of companies available to participate in Private Public
Partnership (PPP) projects, which will lead to delays and in some case cancellations of proposed
infrastructure schemes.
In relation to Saudi Arabia, BMI has no news of specific projects that may be affected by the economic
downturn and it could be a case of 'watch this space'. BMI is, however, confident that the big
infrastructure projects launched in 2008 - especially the main transport infrastructure project which is
currently under way in the country, the Saudi Landbridge - will continue with few delays.
In BMI's Q109 Saudi Arabia Infrastructure Report we have launched our new Project Financing Ratings
in which Saudi Arabia ranks 3rd out of 11 countries rated.
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