Saudi Labour Costs Highest In GCC

Construction labour costs in Saudi Arabia are the highest in the GCC, says a new research report.

Labour costs in the Kingdom are on average 18 per cent higher than in the UAE, and 51 per cent greater than in Qatar, says the Q3 construction costs report by MEED.

Compared to the UAE, the average daily skilled labour rate in Saudi is 22 per cent more expensive and the daily unskilled labour rate is 14 per cent higher.

Emil Rademeyer, General Manager of MEED Cost Indices explained that “as a result of a smaller foreign labour contingent, the average daily rate for labour in Saudi Arabia is significantly higher than in the UAE.”

The report also found that Qatar tops the GCC in terms of construction raw material costs. Raw material costs in Qatar are on average 12 per cent higher than in the UAE and 4.5 per cent more expensive than Saudi Arabia, it said.

“Faced with rapid growth in construction activity on the back of its programme to host the 2022 FIFA World Cup Qatar is seeing strong inflation in materials costs,” the report added.

The average rate per tonne for rebar in Qatar is 32 per cent higher than in the UAE, the price for a 50 kilogram bag of cement is 3.5 per cent more and concrete is 28.6 per cent more expensive.

“A steady rise in the demand for rebar and the anticipation of an impending boom in construction spend is driving up the price significantly higher than in the UAE,” said Rademeyer.

A recent report by consultancy EC Harris also found that Qatar has the highest construction costs in the Middle East, and is the 13th most expensive country in the world to build in.

The annual International Construction Costs Report for 2012 released in August found that the Gulf State had jumped up three places in the overall rankings from the 16th position last year.

The volume of construction activity taking place in Qatar to prepare for the 2022 FIFA World Cup and to deliver the country’s National Vision has led to a rise in costs, the study found.

The report also found that the UAE rose one position on the overall index to rank 17th, while Saudi Arabia climbed eleven places from 36th place in 2011 to rank 25th this year.