DataString Consulting Reports Middle East Building & Construction Industry Poised for Strategic Growth Amid Global Market Shifts

DataString Consulting’s latest analysis of the global building and construction (B&C) industry highlights the Middle East as a resilient and strategically poised market, benefiting from infrastructure-led growth and sovereign-backed investments. While the global construction sector reached USD 14.3 trillion in 2024, driven by residential, commercial, and infrastructure development, the region presents a distinct investment landscape shaped by large-scale projects, policy support, and targeted diversification strategies.

Global Context and Regional Resilience

As per DataString Consulting analysis, the global B&C market operates through four core sectors: residential development, commercial construction, industrial facilities, and infrastructure projects. Residential construction alone accounted for USD 4.3 trillion in 2024, with cement and steel consumption analysis indicating a material-driven market size between USD 2.5 trillion and USD 2.8 trillion. Globally, the sector is transforming through technology adoption including automation, IoT-enabled systems, digital twins, and AI-based project management, reflecting a shift toward sustainable, intelligent, and efficient infrastructure.

For the Middle East, the global housing slowdown has limited impact. Contractors and investors benefit from a market weighted toward commercial, industrial, and infrastructure-led projects. Long-term national visions in Saudi Arabia, the UAE, Oman, and Egypt, reinforced by large-scale energy transition and event-driven infrastructure investments, underpin the region’s growth potential through 2029.

Strategic Drivers in the Middle East

Rising input costs and tariff-driven inflation remain a consideration, requiring robust procurement strategies and regional steel production capacity to mitigate cost pressures. Simultaneously, reduced investment momentum in Western renewable markets offers Gulf states the opportunity to capture a larger share of global capital flows seeking stable, policy-backed projects.

Geopolitical risk continues to influence investment dynamics. The June flare-up involving Israel, the US, and Iran underscored the need for contingency planning in project financing and execution. Nevertheless, sovereign-backed models and extensive project pipelines ensure that the region maintains its trajectory as a growth leader.

Public-Private Partnerships and Delivery-Focused Projects

A key feature of the Middle East market is the rise of public-private partnerships (PPPs) across sectors. In Saudi Arabia, PPP awards reached a record around USD 28 billion in 2023, with continued allocation in 2024 reflecting a strategic shift toward collaborative project delivery. Power generation, particularly renewable energy projects, remains a successful PPP domain, exemplified by a consortium of Acwa Power, Water & Electricity Holding Company (Badeel), and Saudi Aramco Power Company (Sapco) signing around USD 8 billion in power purchase agreements (PPAs) in July 2025. These agreements cover seven renewable energy projects totalling 15,000MW capacity, including 12,000MW of solar photovoltaic and 3,000MW of wind energy assets.

Beyond energy, infrastructure initiatives include worker accommodation linked to mining, roadside facilities, and urban development projects. Abu Dhabi’s Projects & Infrastructure Centre, in partnership with Plenary Group, is advancing schemes such as Khalifa University student housing and Zayed Schools PPP projects. Iraq has launched its first airport PPP for Baghdad International Airport expansion, and Jordan is implementing school, road, and light rail schemes aligned with its Economic Modernization Vision.

Challenges and Market Realities

Despite robust pipelines, challenges persist. Construction cost escalation, labor shortages, and supply chain disruptions continue to impact project execution. Global steel, cement, and glass supply limitations, compounded by geopolitical tensions, create variable construction timelines and cost uncertainties. The Bahrain Metro project illustrates the cautious progress some schemes face, with delays as authorities evaluate alternative solutions.

Opportunities for Innovation and Sustainability

The sustainable construction practices, modular building, and digital construction technologies offer strategic growth pathways for the region. Green buildings, energy-efficient infrastructure, and industrial facilities for the new economy, such as semiconductor fabs, EV gigafactories, and renewable energy plants represent high-value opportunities. Governments across the Middle East continue to support these initiatives, providing investment security and fostering long-term sector stability.

Future Outlook

Looking ahead to next 5 years, the Middle East B&C sector is expected to remain resilient and growth-oriented. Prioritized delivery, PPP adoption, and a focus on cost-efficient execution will shape the region’s market evolution. Coupled with sovereign-backed investment and a robust infrastructure agenda, the Middle East is positioned to be a global B&C growth leader, bridging domestic requirements with international capital flows.

DataString Consulting will continue to monitor these developments, offering insights and strategic guidance to contractors, investors, and policymakers navigating the evolving construction landscape in the Middle East and beyond.