Market Trends of Saudi Arabia Prefabricated Buildings Industry
Increase in Population 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) has grown by about USD 520 billion. This is due to Saudi Arabia's positive trade balance and the fact that Saudi Arabia exports about 2.5 times more goods than it imports. In a developing country, there is a tendency for the population to move to more urban cities where the employment rates are higher. The degree of urbanization in Saudi Arabia grew in 2022. Some of the biggest cities in Saudi Arabia have witnessed urbanization changes first-hand.
- The capital of Saudi Arabia and the biggest city, Ar-Riyad, is home to about 7.1 million inhabitants. However, the high number of illegal immigrants in Saudi Arabia also accounts for the total population. With a rapidly growing total population, there is increasing demand for affordable residential homes in the country. This demand is driving the prefabricated building market in Saudi Arabia. In 2022, Saudi Arabia's total population amounted to 34.79 million inhabitants.
Increase in Demand for Affordable Prefabricated Homes 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 has boosted demand for prefabricated homes, which are both cost- and time-effective and, hence, align with the Kingdom's Vision 2030. There is no doubt that the Saudi government is adopting futuristic methods and concepts, whether they are used to expand current 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.
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 Company (RSI) announced that it 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.
RSI said that it may 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 provide all the requirements for the crew working on the construction of these ambitious projects.
