The share of gross domestic product (GDP) of the construction sector in the Kingdom was valued at SR 89 billion last year, a work paper presented at a recent workshop in the Asharqia Chamber of Commerce and Industry (ACCI) said.

This share registered 19 percent growth compared to 2010 while it stood at 7.5 percent on the basis of the constant price of the year 1999.

The number of visas approved for recruitment of foreign manpower in the sector was 564,000 out of a total of 1.1 million visas approved in 2009.

Despite its vital role in the development of all other sectors, the building sector is facing a number of challenges, the paper noted.

It said the government, which has a vital role to play in removing the obstacles faced by the sector, spent SR 156 billion in the sector in 2006. The amount rose to SR 225 billion in 2009 and SR 256 billion in 2011.

The paper also outlined the features of a field study on the problems of the construction sector that the Riyadh Economic Forum plans to conduct with the participation of a number of contractors in Riyadh and Dammam.

“The construction sector is the engine that drives and rejuvenates the national economy attracting domestic and foreign investments,” Chairman of the ACCI Abdul Rahman Al-Rashid said while speaking at the workshop. He commended the remarkable progress the sector has made over the past five years.

He said it was the duty of businessmen and investors in the Eastern Province to identify the issues and face the challenges.

“The construction sector has the highest and strongest impact on all other sectors,” Chairman of the Board of Trustees of the Riyadh Economic Forum Saad Al Muajil said.

He hoped that all citizens would participate and enrich the discussions of the forum as the forum was meant for all cities in the Kingdom and not for Riyadh alone.

“The study will identify the major issues faced by the sector. It will also find out the sector’s weak and positive points, in addition to its opportunities and risks. It will also recommend the methods and mechanisms essential for the development of the sector,” he said.

The work paper also noted that the sector employed the largest number of workers, using the largest share of the national capital. It was also the largest buyer of national products, the paper said.

One of the major challenges faced by the sector is that it does not have a primary center of authority such as a ministry to motivate its progress and look into its problems.

Other problems faced by the sector included the difficulty of small and medium establishments to provide bank guarantees to obtain financing and the complications in relations between a contractor, the contracting party and supervising engineers. Methods of contract-awarding and calculating the cost of a work and delay in starting the work also posed serious problems to the sector. Difficulties in the way of Saudization and a lack of training centers to produce the needed number of local work force were also counted as serious issues faced by the sector. The paper also pointed out that some regulations were standing in the way of the sector’s smooth growth besides the absence of a building code in the Kingdom.