The construction industry in Saudi Arabia will face fresh challenges this year, with costs predicted to rise by 5-7% in 2024 according to consultancy firm Currie & Brown.
‘Inflation remains the primary challenge for the construction industry and the dominant driver of cost increases. Towards the end of 2023, inflation appeared to be easing. However, the situation remains changeable across the Gulf, with inflationary pressures persisting,’ the report stated.
‘Unpredictable price swings continue to challenge developers in the region, although this is offset by the stability in the current oil price.
One of the solutions that developers can mull over is embracing new ways of working
With costs rising, construction companies need to develop new processes and capabilities to keep costs under control and projects on track, said Currie & Brown. “2024 will bring fresh challenges for the construction industry, but these also present opportunities for firms and clients,” said Doug McGillivray, Managing Director, Southern Gulf.
One of the solutions that developers can mull over is embracing new ways of working, such as modular construction, which can help to cushion the impact of local skills and materials shortages. Incorporating sustainability is also vitally important, as is implementing digitization.
“By considering sustainability, embracing digital technologies, and developing new ways of working, both will benefit from operational efficiencies. This will help mitigate the impact of construction cost increases now and, in the future,” concluded McGillivray.