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The Saudi Agriculture show on the outskirts of Riyadh in September 2012 was testament to the buzz surrounding one of the most interesting agricultural sectors in the Middle East. Investors from Europe and Asia were out in force, promoting everything from irrigation equipment to new animal feeds and fertilisers. According to the Ninth Development Plan, investment in the sector is expected to continue to rise 6.6% annually between 2010 and 2014. Going forward, to improve standards in the farming sector, the Agriculture Information Centre has been set up to gather data on existing operations and determine the viability of alternative farming practices. This and other developments in the pipeline should ensure that local producers have a bright future, as the Kingdom continues to retain its position as the largest market in the GCC. This chapter includes an interview with Waleed Abdulkareem Elkhereiji, Director-General, Grain Silos & Flour Mills Organisation.

While the construction industry in many countries may still be in the doldrums, in Saudi Arabia it is proving to be the driving force behind economic growth. Indeed, all the parts are in place for construction to remain a growing industry over the coming decade. Saudi Arabia has the region's largest market; with its population of 29.2m people – as of 2012 – growing at an annual rate of 2.9%, the need for transport and power infrastructure should continue to grow. In 2012, some $159bn was committed to construction projects, including $67bn allocated for the building of 500,000 housing units and $4.4bn being spent on infrastructure works. While challenges remain for new entrants, the market is gaining in maturity with an improved tendering environment. Moreover, increased competition has the potential to reduce the profit margins for contractors, but it is also likely to improve quality even further.

Having avoided the major boom and bust cycles of its Gulf neighbours, Saudi Arabia’s real estate sector is considered relatively stable. For several years, and certainly since the global financial crisis, the sector has been viewed as a safe haven for local capital; prices in the market have held firm and returns have been solid. With demographic trends and a solid economic base supporting a sustainable housing market, Riyadh and Jeddah remain strong, with rental prices growing between 8% and 15% in 2011, making these yields some of the highest in the world. Changing preferences among the under-30 segment, which makes up 60% of the local population, are reshaping the local housing market. At the same time, the government is attempting to energise the mortgage market with a new law offering legal guarantees and recourse for lenders. With greater confidence in foreclosure procedures, banks are also more likely to support the sector.

Spurred on by strong demand for services, the government is planning to bolster and upgrade infrastructure capacity across all segments of the transport industry. Indeed, with a rising population and increasing trade volumes, the sector is poised for growth. The transport, storage and communications sector accounted for 7.7% of GDP in 2011 and is growing at a rate of 10.63% per year. Planned road and rail expansions are designed to facilitate the movement of goods and develop the Kingdom as a logistics centre for the region, while several new ports are being developed and expansion plans are under way at a number of existing facilities. This should help accommodate rising levels of traffic – container volume was up around 7.5% in 2011. Such projects illustrate the importance the government is placing on the transportation sector to expedite economic growth and diversification. This chapter includes an interview with Prince Fahad bin Abdullah bin Muhammad, President, General Authority of Civil Aviation (GACA), and Chairman of the Board of Directors, Saudia.

Ranked as one of the world’s leading destinations for retail investment, Saudi Arabia is in many respects unrivalled in the Gulf. With a young and rapidly growing consumer base of some 29m people, the Kingdom is the obvious point of entry for retailers looking to start branching out into other promising markets in the wider Middle East region. Indeed, pessimistic forecasts for Saudi Arabia’s retail sector are hard to come by at present. Sales in the sector as a whole are expected to grow annually by 8.6% in 2013, rising to 10.2% in 2015 and 2016. On the supply side, total retail space is continuing to grow as construction proceeds on new development.

With plans in the pipeline to inject significant investment into expanding its output of metals, petrochemicals and plastics over the next several years, Saudi Arabia continues to dominate the region’s industrial activity. This should keep the Kingdom at the forefront of the world’s industrial exporters, at a time when global economic uncertainties are subduing demand for many commodities. As for downstream manufacturing, the government hopes to expand this sector rapidly over the next couple of decades, taking care to tailor new upstream and midstream activities accordingly. Not everybody is sure that Saudi Arabian manufacturers can compete internationally in the long run, but the fact that investments – both Saudi Arabian and foreign – have continued to be announced in 2012 suggests the Kingdom is still seen as a land of opportunity. This chapter includes an interview with Hussein A Al Athel, Secretary-General, Riyadh Chamber of Commerce and Industry.