Saudi builders adjust to longer lead times as shortages persist

Saudi construction projects are ordering materials earlier and increasingly turning to local suppliers as regional disruption continues to reshape supply chains, Mace Middle East and Africa CEO Christopher Seymour tells EnterpriseAM. While some of the initial pressure on costs and delivery times has eased, shortages remain for critical materials, including electrical cables.

Mace, a London-based project management consultancy, has a significant footprint across Saudi Arabia’s construction pipeline. It’s the delivery partner on Qiddiya, program manager for the Sports Ministry’s stadium development program, and is working on King Salman International Airport. Its Saudi portfolio also includes Rua Al Madinah, according to Seymour. The company’s international track record includes major event infrastructure, having worked as delivery partner for the London 2012 Olympics and, alongside Jacobs, as program manager for Expo 2020 Dubai.

The regional conflict disrupted established import routes earlier this year, pushing up logistics costs and extending delivery times. Materials that previously entered through Dammam were, in some cases, forced onto longer routes through the Red Sea and Jeddah, contributing to scarcity and higher costs. “There was definitely a supply chain shock. No doubt about it,” Seymour says.

Projects are adjusting: Contractors have responded by ordering critical materials earlier and allowing more time for them to arrive. That has helped projects absorb longer procurement periods without necessarily translating them into delays to overall delivery schedules.

At the same time, more materials are being sourced inside the Kingdom. Seymour says the shift toward local alternatives has become particularly noticeable over the past six months, reducing reliance on imports for some products and cutting associated transportation costs.

But bottlenecks remain: Seymour singles out electrical cables as an area where there is still “big scarcity,” a pressure already visible in material prices. Saudi Contractors Authority data show electrical cable prices rose as much as 26% y-o-y in July, with several commonly used sizes increasing by around 25%.

The financial impact varies significantly by project and its exposure to particular materials. “On one project you might see the cost impact north of 10%, on others, around 5%,” Seymour says, adding that it was difficult to generalize across the market.

The pressure is starting to ease: The combination of earlier procurement, longer planning horizons, and greater local sourcing has begun to reduce some of the pressure that followed the initial disruption. The apparent scarcity of some materials was easing, and the cost impact had also started to moderate. “I’m not saying it’s gone away, because it hasn’t. All I’m saying is it’s being moderated,” Seymour says.

Mace has expanded its team this year, although Seymour declined to disclose by how much. He described it as a positive year for growth despite the challenges, including a heightened focus on the safety and security of employees during the regional conflict.

What’s next: Mace expects event-led developments and projects capable of generating revenue to remain among the Kingdom’s priority investment areas, with Seymour also pointing to rail and energy as important sectors for the company.