Construction & Engineering
From The Report: Saudi Arabia 2016
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From 2003 to 2013 Saudi Arabia’s second oil boom brought a decade of prosperity for its construction and engineering sectors, but with the brakes applied to public spending, many businesses face a more challenging landscape in 2016. Work is continuing apace on some of the most prestigious projects, such as the Riyadh Metro and King Abdullah Economic City on the Red Sea, but progress has slowed or stalled on many other schemes, and contractors, developers and suppliers face delays on new developments and payments for work they have already completed. However, there may be increased opportunities to work for a broader range of clients as the government considers ways to stimulate private sector growth in order to meet the needs of an expanding population.

This chapter contains an interview with Mounib Hammoud, CEO, Jeddah Economic Company.

Articles from this Chapter

Overview

Shifting sands: Public spending cuts have contributed to a slowing of growth
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From 2003 to 2013 Saudi Arabia’s second oil boom brought a decade of prosperity for its construction and engineering sectors, but with the brakes applied to public spending, many businesses face a more challenging landscape in 2016. Work is continuing apace on some of the most prestigious projects, such as the Riyadh Metro and King Abdullah Economic City on the Red Sea, but progress has slowed or stalled on many other schemes, and contractors, developers and suppliers face delays on new developments…

Interview

Opportunity knocks: OBG talks to Mounib Hammoud, CEO, Jeddah Economic Company
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Interview:Mounib Hammoud To what extent are factors such as declining oil prices, subsidy cuts and regional challenges adversely impacting the construction industry? MOUNIB HAMMOUD: The construction sector in Saudi Arabia has been adversely affected by domestic and exogenous factors such as lower global oil prices, regional unrest, subsidy reductions and budget declines. That being said, the current macroeconomic environment and state of the construction industry should not be of great concern…

Analysis

Wage inflation: Construction firms have seen costs rise with new labour laws
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Although they benefitted from more than SR220bn ($58.7bn) per year in new contracts between 2011 and 2014, according to National Commercial Bank, many Saudi construction firms have seen their margins squeezed by escalating costs in recent years. One of the greatest challenges in balancing their books has been the impact of new labour regulations on their wage bills. Saudis in the Kingdom outnumber foreigners two to one, yet fewer than one in 10 workers in construction are Saudi citizens. In contrast,…

Analysis

Home comforts: New developments part of a push to boost home ownership rate
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With population growth of 2.4% in 2015, there is a rising need for housing in Saudi Arabia, and the government has introduced measures to create half a million affordable units for its citizens, only 30% of whom currently own their own homes. The latest initiative is a 2.5% tax on undeveloped land, which was introduced on June 15, 2016. Eskan In 2011 the late King Abdullah bin Abdulaziz Al Saud called for the construction of 500,000 affordable properties for citizens, and in 2014 the Ministry of…