Cranes and modular buildings reshape a Middle East skyline as giga-projects and urban demand drive construction activity.
Middle East, September 3, 2025
The Middle East construction market reached USD 386.09 billion and is forecast to grow toward roughly USD 713 billion, propelled by large state plans, giga-projects and rapid urbanisation. Saudi Arabia and the UAE account for the largest market shares, while event-driven deadlines and tourism targets intensify demand for airports, hotels and stadiums. Expansion faces headwinds from foreign-worker caps, supply-chain disruptions, limited local materials capacity and climate-driven technical risks. Developers are scaling modular prefabrication, digital tools like BIM and PPP financing to meet fixed deadlines. Firms that combine modular methods, digital workflows and deeper local supply ties are best positioned to win work.
The Middle East construction market reached USD 386.09 billion in 2024 and is projected to grow to USD 413.31 billion in 2025, rising to USD 712.80 billion by 2033 at a compound annual growth rate of 7.05% for the forecast period 2025–2033. This update to the market outlook was last refreshed in September 2025 and highlights strong state-led investment, major event-driven projects and rising urban demand as the main growth engines.
National transformation plans are the main growth driver. Blueprints such as Saudi Vision 2030, UAE Centennial 2071 and Qatar National Vision 2030 push spending into urban development, tourism and smart cities. Governments are using sovereign wealth funds and large public budgets to fund roads, airports, housing, tourism resorts and sports venues tied to major events. The region is also seeing rapid city population gains that boost housing and transport demand; for example Dubai’s population rose 4.3% in 2023 to 3.6 million.
Saudi Arabia is the dominant market, accounting for about 39.3% of the region in 2024, supported by more than USD 1.5 trillion allocated to gigaprojects. NEOM is valued at USD 500 billion and covers some 26,500 km², including The Line, a planned 170‑km linear city. The country also reported construction capital expenditure of SAR 178 billion (USD 47.5 billion) in 2023, up 22% year‑on‑year. Saudi housing activity remains large, with over 700,000 housing units under construction and the “Housing Saudi” programme delivering more than 300,000 units in 2023.
Regional event agendas are adding deadlines and scale. Saudi Arabia will host multiple major events over the next decade, including continental and global sports events and Expo 2030 in Riyadh. These calendars are driving stadium builds, airport expansions and mass transit work. Notable project moves include a USD 800–900 million contract for a Riyadh Metro extension and early-stage work and tendering for the Expo 2030 masterplan, where construction works are estimated at USD 7–10 billion.
The United Arab Emirates held the second largest share at about 28.3% in 2024, underpinned by heavy public and private works in Dubai and Abu Dhabi. Dubai recorded AED 182 billion in construction permits in 2023, a 22% rise, and the city continues major transport, housing and sustainability programmes. Across the wider Middle East and North Africa region, governments from Egypt to Morocco are also mobilising significant projects, though some non‑GCC markets face economic constraints that slow private investment.
Several constraints could hold back growth. Labour shortages and policy shifts are a major issue: Saudi Arabia’s 2023 cap limiting foreign workers to 30% per company hit over 40% of construction firms and, combined with reduced recruitment from traditional sending countries, caused delays. Reports of wage arrears and poor living conditions have spurred unrest in parts of the sector.
Materials and supply chains remain vulnerable. The 2022 Red Sea shipping crisis delayed 38% of construction material shipments to Saudi Arabia and Jordan, adding an average 45 days to lead times. Local manufacturing is still limited — only 12 integrated cement plants operate across the GCC — so the region relies heavily on imports.
Financial constraints persist outside the GCC. Currency instability and FX shortages cut private investment in markets like Egypt, and very high public debt levels in some countries make large projects impractical without external support. Limited long‑term credit and thin bond markets also increase reliance on state budgets.
Modular and prefabricated methods are gaining ground to reduce on‑site labour and speed delivery. A major residential pilot completed by a national builder used modular units to deliver 600 homes in 18 months — about 40% faster than traditional methods. Industry analysis suggests modular can cut on‑site labour needs by up to 60% and waste by 35%. Regional prefabrication hubs have been established to serve growing demand.
Environmental rules and climate targets are shaping project design. The UAE has more than 2,800 buildings registered under a local sustainability rating and Abu Dhabi requires a minimum two‑pearl certification for new government buildings. Saudi Arabia has introduced a green building code for public works. Model cities such as Masdar City and Egypt’s New Administrative Capital test solar integration, water recycling and low‑carbon materials.
The market remains contested by national champions, multinational groups and strong regional firms. Contractors are differentiating through digital tools like BIM and digital twins, off‑site construction, sustainability credentials, and faster delivery. The sector is also seeing consolidation as financially stable firms acquire weaker competitors to boost capacity.
The Middle East & North Africa construction equipment market was valued at USD 11.04 billion in 2024 and is forecast to reach USD 13.81 billion by 2030 at a 3.81% CAGR. Demand is driven by urban expansion, mechanisation and big infrastructure programmes, though high purchase and maintenance costs remain a hurdle.
The hotel pipeline is also large and growing, reflecting tourism and event demand. As of Q2 2025 the region had a record 650 hotel projects totalling 161,574 rooms, with Saudi Arabia leading the tally of projects and rooms.
Early 2025 saw a slowdown in contract awards in the GCC, with a 39% drop in the first five months versus the same period in 2024, driven mainly by a slowdown in some Saudi gigaproject activity. Still, the region retains a deep pipeline of ongoing projects across airports, transport, tourism and housing. The near term will increasingly favour projects with clear deadlines and private‑sector involvement through PPPs, while medium‑term growth will depend on resolving labour, supply‑chain and financing constraints.
The market reached USD 386.09 billion in 2024 and is forecast to rise to USD 712.80 billion by 2033.
Growth is driven by state transformation plans, large gigaprojects, urban population growth, event‑related deadlines and rising investment in airports, hotels and housing.
Key risks include labour shortages and policy caps on foreign workers, supply‑chain disruptions and limited local material production, along with financing constraints in non‑GCC markets.
Modular and prefabrication methods, BIM, digital twins and AI‑driven scheduling are being used to cut labour needs, reduce waste and speed up delivery.
Saudi Arabia accounted for about 39.3% of the market in 2024 and the UAE held about 28.3%. Both remain the region’s largest construction hubs.
The construction equipment market was valued at USD 11.04 billion in 2024 and is expected to reach USD 13.81 billion by 2030. The hotel pipeline reached an all‑time high in Q2 2025 with 650 projects and more than 161,000 rooms.
| Feature | Key fact |
|---|---|
| Market size (2024) | USD 386.09 billion |
| Market forecast (2033) | USD 712.80 billion |
| Forecast CAGR (2025–2033) | 7.05% |
| Top country (2024) | Saudi Arabia — 39.3% market share |
| Second largest | UAE — 28.3% market share |
| Major gigaproject | NEOM — USD 500 billion, 26,500 km², includes The Line (170 km) |
| Material & supply risks | Red Sea crisis 2022 delayed 38% of shipments; +45 days lead time |
| Labour constraint | Saudi 30% foreign worker cap affected over 40% of construction firms |
| Modular wins | 600‑unit project delivered in 18 months (40% faster); modular can cut labour up to 60% |
| Equipment market (2024) | USD 11.04 billion; forecast USD 13.81 billion by 2030 |
| Hotel pipeline (Q2 2025) | 650 projects / 161,574 rooms; Saudi leads with 342 projects |
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