Saudi Arabia Leads Global Construction Boom, Despite Talent Shortages

Saudi Arabia is leading the world in construction activity, according to the latest Global Construction Monitor from the Royal Institution of Chartered Surveyors (RICS). With a remarkable construction activity reading of +72% in Q4 2023, the kingdom is driving infrastructure and public works projects at an unprecedented pace.

However, this surge in construction activity is being hampered by a severe shortage of skilled and unskilled professionals. Over 70% of industry respondents reported shortages of workers to keep up with the pace of output growth, with many citing a “shortage of skilled manpower” and difficulty “finding the right caliber of staff.”

Beyond just manpower gaps, some respondents expressed concerns about competency issues among existing workers. “Some are not competent to do their jobs” and “many lack proper planning skills and fail to engage in Front-End Loading planning, which is essential for effective project management,” said one respondent in Dammam.

The dearth of unskilled labor is also a significant issue, with over a third of firms struggling to hire general laborers. Rising costs, localization policies, and other challenges are also affecting the sector.

Despite these challenges, some respondents viewed the booming construction activity as an opportunity. “The significant shift of trades from nearby GCC due to the volume of work contributes to the increase of non-oil exports of KSA,” said one Riyadh respondent.

With over $1.1 trillion in mega-projects planned or underway, pioneering solutions to the labor crisis will be critical for maintaining Saudi Arabia’s newfound status as the global construction capital.