Market Trends of Saudi Arabia Prefabricated Buildings Industry
Increase in Population is Driving the Market
- Saudi Arabia, the second-largest Arab state, is a nation in development. As a result of economic stability, gross domestic product (GDP) grew by about USD 520 billion. This can be attributed to Saudi Arabia's positive trade balance and the fact that Saudi Arabia exported about 2.5 times more goods than it imported. In a developing country, there is a tendency for the population to move to urban cities where the employment rates are higher. The degree of urbanization in Saudi Arabia increased in 2022. Some of the biggest cities in Saudi Arabia witnessed urbanization changes first-hand.
- The prefabricated building market in Saudi Arabia is witnessing innovations in design, materials, and technology, leading to higher-quality and customizable building solutions. This trend is particularly evident in the construction of residential buildings, where developers offer prefabricated housing units with modern amenities and architectural designs.
- The capital of Saudi Arabia and the biggest city, Ar-Riyad, is home to about 7.1 million inhabitants. The high number of illegal immigrants in Saudi Arabia is also included in the total population. With a rapidly growing total population, the demand for affordable residential homes is increasing in the country, driving the prefabricated building market. In 2022, Saudi Arabia's total population amounted to 34.79 million inhabitants.
The Demand for Affordable Prefabricated Homes is Increasing in Saudi Arabia
In Saudi Arabia, modular building is gaining pace. As a result of the country's rising population, the residential construction industry in Saudi Arabia is experiencing a lack of affordable housing.
This boosts demand for prefabricated homes, which are both cost- and time-effective and, hence, align with the country’s Vision 2030. The Saudi government is adopting futuristic methods and concepts to expand existing cities, such as Riyadh, or to create new cities, such as the Red Sea or NEOM.
The Red Sea Project's development improves prefabricated and modular construction methods, reducing delivery time, improving quality, and reducing construction's negative environmental impact. In addition, the adoption of innovative techniques like 3D printing for construction under the Red Sea Project is creating space for more rapid on-site construction as well as considerably reducing overall time-frames and schedules.
Modular construction has emerged as a feasible solution as projects hurry to completion amid unprecedented challenges. It provides a safer building environment while reducing staffing requirements by 30%, making it a suitable solution for post-pandemic situations. When compared to traditional construction, manufacturing construction can cut material waste by 30% and improve worker safety by up to 70%.
Many modular construction companies are investing in the country. For instance, in January 2022, Saudi Arabia-based modular construction company Red Sea International (RSI) signed a SAR 61 million (USD 16 million) contract with the Red Sea Development Company (TRSDC) to design, manufacture, supply, and install modular buildings to support its construction activities. In addition, in 2023, the Red Sea International Company entered into a SAR 29 million (USD 7.76 million) contract with The Fundamental Installation for Electric Work Company, also known as 'First Fix.' The agreement involves designing, manufacturing, supplying, and installing prefabricated buildings for a residential project in NEOM.
RSI aims to install three modular building complexes in the Western region to support the construction activities of luxury hotels on the three islands in the Red Sea. These units are likely to be fully furnished to meet all the requirements of the crew working on the construction of these ambitious projects.
