Saudi Arabia’s projects market is on course to roughly match last year’s even as most of the industry says conditions have gotten worse

Saudi Arabia’s projects market has spent 2026 defying the mood of the people building it. The Kingdom has awarded USD 76 bn in contracts so far this year, against USD 102 bn at the same point in 2025 — behind last year’s pace, but by less than a year of regional conflict, cost inflation, and supply disruption might have threatened, Meed’s head of content and analysis Edward James said in a webinar attended by EnterpriseAM (watch, runtime: 1:34:04). The business intelligence firm expects a run of awards in November and December to carry the full-year figure to USD 100 bn — “quite remarkable,” James said, “given the set of circumstances.”

That resilience is not what the industry feels. Asked how the market had performed against 2025, 70% of webinar attendees said it had gotten worse — 50% a little worse, 20% much worse — and just 8% thought it had improved. A separate poll found 94% had seen their business disrupted by this year’s regional conflict, with 30% severely disrupted.

The dip is concentrated in sectors that have already built ahead: Power awards are down 77% y-o-y to USD 4.9 bn and water down 66% to USD 3.7 bn, the steepest falls anywhere in the market. The reason is overbuilding: So much generation and desalination capacity was tendered across 2023, 2024, and 2025 that the need to award more this year has eased. Excluding utilities, the picture reverses. Construction awards have already hit USD 32 bn with two months left on the clock and will comfortably beat last year’s USD 33 bn; gas (USD 10.6 bn), chemicals (USD 6.1 bn) and transport (USD 10.3 bn) are all running ahead of 2025, with industry set to follow at USD 5 bn.

And gigaprojects, while slowed, were never carrying the market anyway. Awards reached USD 10.6 bn in 2026, and even at their 2023-24 peak, gigaprojects represented USD 31 bn of more than USD 130 bn awarded across the Kingdom in 2023, and USD 26 bn of a record USD 170 bn in 2024. The program has been shedding spending since, mainly because of the reprioritization at Neom, with The Line and Trojena pushed back. Qiddiya and Diriyah, however, are “full steam ahead,” James said, with Roshn and the Expo build-out also going strong.

But data centers have become a market of their own. Active data center projects in the Kingdom reached USD 180 bn today from USD 1.8 bn in 2023, a hundredfold jump in three years. At roughly USD 10 mn per MW, Humain’s planned 6 GW AI campus alone implies something on the order of USD 60 bn of spending. Humain, DataVolt, Khazna, and Amazon Web Services are all building.

The hardest problem for contractors this year has been cost: Most work in the Kingdom is let on lump-sum terms with no cost-escalation clause — Aramco and the big EPC jobs are the exception — which leaves contractors exposed when commodity and equipment prices move. James cited increases of up to 70% in extreme cases tied to the conflict, with local prices for rebar, copper wiring, steel and aluminum up 4-6%. Domestic sourcing of 60-70% of materials and equipment has helped cushion shipping disruptions, alongside modular construction and prefabrication. Few projects have been cancelled or halted outright because of the conflict, despite delays, he said.

The near-term pipeline gives the optimists something to point at: USD 144 bn of Saudi work is out to bid — tenders issued or bids under evaluation — within USD 349 bn across the Gulf, most of which would typically be awarded inside six months. The live list runs from green ammonia complexes, the Rabigh bottom-of-the-barrel project, steel plate facilities, solar IPPs and Jafurah Phase 5 on the energy side, to Riyadh Metro Line 7, the Asir-Jizan road PPP, King Salman Park and King Salman Airport’s Terminal 6 on construction and transport. But the list is indicative; projects may slip, be rescoped or cancelled.

Where spending will concentrate in the next two years is Riyadh, driven by deadlines for Expo 2030 and the 2034 World Cup. Diriyah and Qiddiya are meant to be substantially ready for the Expo, and King Salman International Airport has to be in place for both. Add Roshn and the National Housing Company — funded by off-plan sales, which insulates them from government budget pressure — and the push behind hundreds of thousands of housing units, and Riyadh holds the bulk of the near-term pipeline. The Eastern Province is the other bright spot, lifted by Aramco, while Tabuk, Neom’s province, has seen the sharpest provincial decline.

Longer out, the numbers get very large. Saudi Arabia holds USD 1.69 tn of known, planned and unawarded projects — more than the other five Gulf states combined, and ahead of the UAE’s USD 980 bn — within a record USD 3.3 tn regional pipeline. Construction dominates at close to USD 2 tn.

The 2027 question hangs on the budget. Higher defense spending could divert funds from projects. The optimistic case rests on the Kingdom’s wider financing toolkit — PPPs, export-credit and sovereign loans, bond issuances, and off-plan sales — helping sustain investment, alongside ins. covering much of the conflict-damaged infrastructure. Adding expected oil prices of around USD 115 a barrel and exports near pre-conflict levels, that could leave major producers earning more than before.

What’s next: Watch for a year-end award surge in Riyadh Metro Line 7, King Salman Airport’s Terminal 6 and the Asir-Jizan road. King Salman Stadium, the 2034 World Cup final venue, has moved to main works, while procurement has opened for the US and UK pavilions at Expo 2030, with 190 more countries to follow. Aramco Stadium in Dammam is nearly finished and Qiddiya’s is under construction. James sees the Neom stadium as the likeliest casualty among the roughly 10 venues Saudi Arabia has committed to delivering for FIFA.