RIYADH: Saudi Arabia’s construction sector is leading the world when it comes to expected employment growth, according to a survey by the Royal Institution of Chartered Surveyors.
Research by the London-based firm found that 78 percent of those surveyed in the Kingdom anticipated an increase in the sector’s workforce over the next 12 months, compared to a global average of 23 percent.
The next closest was India, with 75 percent of respondents expecting employment growth.
The RICS survey also revealed that 93 percent of Saudi respondents believed infrastructure workloads would increase over the next 12 months — up from 85 percent who held that view in the first three months of the year.
The organization described the Kingdom’s construction sector as running “exceptionally hot”, adding that “demand for skills and materials (are) particularly high, causing related costs to mount.”
A press release from RICS said: “Looking to the future, profit margins are still expected to grow, while new business enquiries recorded a very high figure of +89 percent.
“Meanwhile, 12-month expectations continue to report exceptionally positive figures in all construction sectors, but particularly in infrastructure and public works, which recorded a +93 percent reading — its highest in a year.”
Companies operating in the construction sector are also bullish when it comes to an increase in profit margins, with some 53 percent of Saudi respondents expecting growth in the next 12 months.
This is almost double the share for the Middle East and Africa region, which recorded a net balance reading of 22 percent.
The construction of Saudi giga-projects — such as the $500-billion city of NEOM — are helping to fuel growth in the sector, but the workload increase is also leading to a shortage of workers.
“According to survey respondents, factors holding back projects include ongoing labor and skills shortages, as well as the high cost of materials, which respondents firmly believe will continue to rise (+71 percent). All types of skills are witnessing shortages, but the primary shortage according to respondents is Quantity Surveyors (+75 percent). There also appears to be a less pronounced shortage in unskilled labor (+23 percent),” said the press release.
The RICS had 51 respondents from different firms in Saudi Arabia, and 2,879 globally.