Purchasing power on building materials, sanitary ware and cement has dropped by 30 percent as a result of stagnation of small and medium projects and shortage of legalized and trained foreign laborers in the local market, media said quoting experts.

Experts, investors and consumers are reportedly following the reality and future of the construction market in the aftermath of the recent government measures (against illegal workers), notably as small and unlicensed contractors were running 70 percent of contract works for the implementation of small businesses such as houses and shops, Al-Eqtisadiah daily said.

Head of Contractors’ Committee at the Council of Saudi Chambers (CSC) Fahad Al-Hamadi said the construction sector is currently witnessing an unprecedented fall due to government correction measures.

He said prices of building materials, sanitary ware and electrical equipment have dropped by 40 percent compared to the last three months. One bag of cement in the local market reached SR12 compared the previous price of SR16, he said.

Meanwhile, fare of specialized and regularized foreign labor in the area of electrical works, plumbing, sanitary ware, and paint increased at rates ranging 30-40 percent due to the growing demand on such laborers.

Earlier, Member of Contractors’ Committee Fahad Al-Nasban said unlicensed contractors in the Kingdom are running more than 70 percent of contract works and employing illegal workers not committed to quality standards.

The number of contracting firms officially registered stands at 200,000 Kingdomwide but those which are categorized ones by the Ministry of Municipal and Rural Affairs are not exceeding 2,000 and thus many unauthorized contactors have quit the market waiting for the outcome of the inspection campaigns against irregular laborers, he said.

Al-Nasban called on citizens to consult chambers of commerce and industry to get the list of contactors approved by the committee and the ministry to avoid entering into fake contracts with small and irregular contracting companies.

On the other hand, Madinah Chamber of Commerce and Industry (MCCI) member Abdulghani Al-Ansari said the deportation decision of the irregular foreign workers might lead to the bankruptcy or closure many of small and medium enterprises.

He said the inspection campaigns have brought about positive and negative results adding that the market is still in a mess where mistakes of 40 years could not be corrected in two or three months.

He said prices of labor have increased and some of projects stalled in the absence of control over small-scale enterprises, estimated at 1.8 million, which have major role in the Saudi economy.

Head of foreign education at Sharqia Chamber Khalid Al-Hammad said the inspection campaigns have negatively affected work progress of foreign and international education where the labor office is longer cooperative with the private and foreign education.

He said 65 percent of foreign and 30-35 percent of national (private) schools had negatively been affected by the recent measures and owners of the schools may be forced to close down unless the situation is corrected.