In recent years, Saudi Arabia has embarked on an ambitious path. It is implementing large-scale construction projects that are changing the country’s landscape. Among the most famous are NEOM, The Red Sea Project, Qiddiya and the Riyadh Metro. The possibility of implementing such projects is largely due to the Vision 2030 program being implemented in Saudi Arabia.
The benefits of this construction boom are hard to overestimate. It is not only about infrastructure development, economic revitalization and unprecedented labour market growth, but also about the country’s image as a modern and progressive state.
Benefits for the country and labour market dynamics
The main advantage of these large-scale construction projects is the diversification of the economy. By investing in infrastructure, tourism, entertainment, and technology, Saudi Arabia is seeking to create a more sustainable economy. Projects such as NEOM, the Red Sea project, and the expansion of urban centers are designed to attract foreign investment and stimulate domestic industry. This diversification is expected to increase the country’s GDP and reduce dependence on oil revenues, which have historically been volatile.
The development of a strong construction sector creates additional jobs in related industries, such as manufacturing, logistics, and services, thereby contributing to broader economic benefits. The expansion of construction activities has also led to a significant demand for specialists and the creation of new jobs. This is evidenced by the number of current vacancies posted on popular, trusted job search platforms like Layboard.
With the launch of new projects, the demand for skilled and unskilled labour is growing. The Kingdom is becoming more interesting for job seekers from abroad and for residents of the country. It is not only about jobs in the construction industry, but also in related fields such as manufacturing, logistics, and services, thereby contributing to broader economic benefits. Works like this one are becoming more and more common https://layboard.in/vacancies/jobs-in-saudi-arabia/speciality/handyman
Noteworthy Mega-Projects in Saudi Arabia
Among Saudi Arabia’s colossal construction projects, several stands out for their scope, innovative designs, and transformative potential:
- NEOM: a futuristic metropolis worth $500 billion. NEOM’s 26,500 square kilometres will be home to sectors focused on biotechnology, energy, water, food, and digital sciences.
- Red Sea Project: being developed as a sophisticated coastal resort area on 50 islands.
- Kiddiya: positioned as the entertainment and sports capital of Saudi Arabia.
- King Salman Park: The green space will spread over 13 square kilometres in Riyadh. King Salman Park will have a large garden
These projects represent a bold step toward reshaping Saudi Arabia’s economy and position it as a global destination for tourism, technology, and commerce.
Explosion of vacancies
Statistics show the profound impact of these large-scale projects on the labour market. Prior to the launch of these initiatives, the unemployment rate in Saudi Arabia hovered around 12.5% in 2018, with a significant portion of the workforce made up of foreign workers. However, with the start of the projects, the demand for labour has increased dramatically. This is evidenced by data from job search platforms such as Layboard. According to the latest reports, the construction sector is showing annual growth of about 8.5%, which has contributed to a decrease in the unemployment rate to 9.7% by mid-2023.
In addition, the number of vacancies in the construction industry has increased rapidly. Data from the Saudi Ministry of Human Resources and Social Development show that the number of vacancies in the construction sector increased by more than 50% from 2019 to 2023. This demand was primarily driven by projects requiring both highly skilled labour, such as engineers and architects, and low-skilled manual laborers.
To illustrate, in 2020-2023, the total number of work permits issued to construction workers increased from 250,000 to over 400,000. This trend emphasizes the urgent need for a diverse workforce capable of supporting various types of construction activities, from large-scale infrastructure to urban development projects.
Demand for expats
Historically, foreign workers have made up a significant portion of the Saudi workforce, especially in the construction sector. It is estimated that before these large-scale projects began, foreign workers accounted for about 80% of the construction workforce. This dependence was due to the rapid growth of the industry in previous decades, when the involvement of foreigners was a quick solution to the existing problems of shortage of specialists in various fields.
However, the current construction boom has caused this dynamic to change. As the government has focused on increasing local employment, initiatives have been introduced to encourage the hiring of Saudi nationals. As a result, the share of Saudi workers in the construction sector has gradually increased. As of 2023, it was reported that Saudi nationals accounted for approximately 30% of the construction workforce. This represents a marked increase from 20% in 2019.
However, foreign workers still play a crucial role in meeting labor demand, especially with specialized skills that are still lacking in the local workforce. Thus, the government is faced with the task of balancing the need for foreign labor while promoting local employment.
In the long run, Saudi Arabia aims to position itself as a leading tourism and business hub, comparable to global cities like Dubai. The large-scale developments are intended to enhance the country’s global reputation, attract visitors from around the world, and provide residents with a higher quality of life. By 2030, it is expected that non-oil sectors will constitute a much larger portion of the GDP, marking a significant shift from the oil-dependent past.
Moreover, the intensification of construction is likely to promote advancements in sustainable building practices and renewable energy solutions. Projects like NEOM are committed to using clean energy sources, setting a precedent for green development in the region. Saudi Arabia has ambitious targets to reduce its carbon footprint and embrace environmentally friendly technologies, aligning with global standards and contributing to the fight against climate change.