Skip to content Skip to Search
Skip navigation

GCC construction dilemma as Saudi ‘sucking up’ skilled talent

Workers on a construction site in Riyadh GCC Reuters
Saudi Arabia's neighbours say there is a construction talent drain, but companies in Riyadh are also complaining of staff shortages
  • Saudi giga-projects draining construction talent, GCC neighbours say
  • Projects under way in Saudi Arabia are worth $1.1 trillion
  • Over 80% of Rics survey respondents worried about talent shortages

Saudi Arabia’s huge construction projects are luring workers out of neighbouring countries in the GCC and resulting in skills shortages, say experts and builders.

Construction executives in the UAE and Oman in particular have voiced concerns about the overall resource demands of the region as Saudi Arabia’s market continued to show strong growth during the first three months of 2023.

Driven by ongoing demand fuelled by multi-billion dollar projects such as Neom, Diriyah and the Red Sea Project, the war for talent is intensifying across the Gulf, the Royal Institution of Chartered Surveyors (Rics) said.

Jordan D’Gama, head of strategic partnerships for Middle East & Africa at Rics, told AGBI that since the Covid-19 pandemic, it had noticed “a significant increase in demand from both member and non-member firms in the war for skilled construction talent within Saudi Arabia”. 

“In particular, we have noticed this as developers seek to ramp up activity in Saudi’s giga projects in line with Vision 2030.”

The Rics Global Construction Survey for Q1 noted comments from industry professionals working in Dubai that suggest the level of activity in the kingdom is directly impacting projects in the UAE. 

Other factors holding back activity are material costs and general financial constraints, according to the report.

Construction executives working in Muscat, Oman, also complained that Saudi Arabia is “sucking up” all available resources.

Sindalah will be the first luxury island destination in Saudi Arabia’s $500bn Neom giga project
Saudi shortages

However construction companies working in Saudi’s capital Riyadh insist they too are experiencing a shortage of skilled workers. Over 80 percent of the Rics survey respondents said that skills shortages are holding back activity. 

Global engineering firm KPM Engineering said on Monday that it expects projects in Saudi Arabia to make up 50 percent of its GCC workload this year – up from 30 percent in 2022 and involving a total of 6 million sq ft.

Rics named Saudi Arabia as one of the world’s most active markets during Q1, with 12-month workload expectations remaining very strong and profit margin forecasts also positive. 

Faisal Durrani, partner and head of Middle East research at Knight Frank, said there were “tremendous challenges” in realising the kingdom’s real estate and infrastructure projects, which are worth $1.1 trillion. Durrani said that meeting standards of speed, cost and quality will require jumping hurdles including scale and capacity. 

According to new figures released by the US-Saudi Business Council, the value of awarded contracts returned to pre-pandemic levels during the fourth quarter of 2022, reaching SAR71.5 billion ($19.1 billion). 

This marked the highest value of awarded contracts in a quarter in nearly seven years (it reached SAR88.1 billion in Q1 2015). 

“The surge in contract awards continues unabated on the back of a growing economy that was fuelled by significant oil revenues and the acceleration of giga-projects following the Covid-19 slowdown,” said Albara’a Alwazir, director of economic research at the US-Saudi Business Council. 

A combined $110 billion worth of construction contracts are expected to be awarded in the GCC this year, according to Middle East data provider Meed Projects’ 2023 outlook. Saudi Arabia will account for more than half of the total.

Saudi authorities “have already instated a programme to help transition contractors into national development champions,” Durrani added.

“This will allow developers to take a more strategic view of their super cities, focusing perhaps on how these cities of tomorrow work not only with existing infrastructure, but also with one another and Vision 2030 itself.”

Latest articles

Adnoc sought advice from investment banks on buying a significant stake in BP, a media report said

UAE’s Adnoc explored acquiring BP

Abu Dhabi National Oil Company (Adnoc) explored the possibility of acquiring British oil major BP but abandoned the plan as it did not fit into its strategic growth objectives, a media report said.  The talks did not advance beyond the initial stages, Reuters reported, citing informed sources.  The UAE state oil company also sought advice […]

Nature, Undersea cables account for as much as 90 percent of Europe-Asia telecommunications, Water

Iraq and Kuwait team up for European telecom corridor

Iraq’s Informatics and Telecommunication Public Company, a division of the Ministry of Communications, has signed an agreement with Kuwait’s Zajil Telecom to create a telecommunications corridor from the Gulf region to Europe, transiting through Iraq and Turkey. The new route will pass through Iraqi sea and land ports. Iraq’s minister of communications Hayam Al-Yasiri said […]

Turkish crude steel output rose 25% year on year to 3.2 million tonnes in January

Turkish steel in the black but EU rules rankle

Turkey’s steel industry has rebounded strongly from a weak 2023, despite facing new emissions standards and competition for important markets.  Crude steel output rose 25 percent year on year to 3.2 million tonnes in January, with domestic consumption of finished steel reaching 3.5 million tonnes, a 20 percent increase.  Exports were also up, increasing 23 […]

Passengers at Beijing Capital International Airport. Air China will fly from the airport to Riyadh three times a week.

Third Chinese airline to launch flights to Saudi Arabia

Air China is set to begin flights to Riyadh in May, becoming the third Chinese airline to establish a route to Saudi Arabia. It joins China Southern and Eastern Airlines in connecting China with the kingdom.  Air China’s Airbus A330-300 will serve the Beijing-Riyadh route three times a week. The expansion in capacity between the […]