The chief executive of Emaar Economic City (EEC) Fahd Al Rasheed said that construction costs in Saudi Arabia dropped by 10 to 15 percent per square meter.
He said in his statement to Reuters that construction firms in Saudi Arabia are paying less for construction, EEC for example is paying 15% less.
Al Rasheed attributed the costs decline to the cuts in state spending which reduced the pressure on supplies of building materials and labor.
The oversupply of building materials, low number of contracts issued by the government, and contractors’ improved capacity, are some of the main reasons leading to the current drop in construction costs, according to Al Rasheed.
Saudi Arabia has reduced its spending over construction projects since 2015 as a part of its plan to curb the major budget deficit caused by the drop of oil prices.
It’s worth mentioning that Emaar Economic City is an affiliate of the UAE-based Emaar Properties Group. The company is developing King Abdullah Economic City, a major industrial and residential project residing on the shore of the Red Sea.