Saudi Arabia's construction industry is set to grow by an average of about four percent to 2015, and will be driven in part by low cost residential housing, Business Monitor International has said. Analysts said they anticipated that housing will increase as a proportion of total construction spending over the coming years as the Kingdom bids to meet the huge and growing housing deficit which is impacting its young and expanding population. Underpinning this will be the government's pledge to invest half of the $133 billion in social spending measures - announced in March - on housing, BMI said in a new report. The report said a $1.3bn housing project that will see 30,000 low cost homes built in the Kingdom over the next five years will provide welcome new supply - in a country where the dire lack of affordable homes. In March, Saudi Arabia's government announced a raft of social spending measures which included a pledge to build 500,000 new homes over the next few years. BMI said that anchored by vast public spending, it believed that the kingdom's residential construction sector will be a "regional outperformer over the short-to-medium term". The latest data from Saudi Arabia's Construction Contracts Index (CCI) revealed a 156 percent jump in the value of contracts awarded in the first half of 2011 compared to the equivalent period in 2010. "The surge in activity is even more notable given the political events and popular unrest that have swept across the Middle East and North Africa (MENA) region since the start of the year," the BMI report said. "While Saudi Arabia did not escape scenes of unrest and simmering tensions remain, the government's 'iron grip' and ability to spend its way out of trouble have largely shielded the Kingdom's construction industry," it added. Analysts said that with ongoing political uncertainty in Egypt and Bahrain likely to make investors think twice before embarking on major construction projects, investor focus on the Kingdom is likely to intensify in the near
