Saudi defense sector to contribute SAR 231 bln to GDP by 2020: report

The Saudi defense sector is expected to contribute SAR 231.27 billion to the Kingdom’s gross domestic product (GDP) by 2020, according to a new report by the US-Saudi Arabian Business Council.

The report noted that demand in the Saudi Arabian defense and security sector will expand at a compound annual growth rate (CAGR) of 1.48 percent through 2020 and at a CAGR of 1.71 percent over the next decade.

By 2028, the public administration and defense sector will generate 2.52 million private sector jobs within the Kingdom, the report said.
  
“In the coming years, we expect the Kingdom to progress towards the localization objectives of Vision 2030 while still expanding opportunities for the private sector across the training services, cybersecurity, MRO activities, and command and control segments,” Abdullah Jum’ah, Saudi co-chairman of the Business Council and former CEO of Saudi Aramco, said.

The report further indicated that opportunities have emerged in the market for personal and perimeter security products.

Moreover, of the foreign companies that have transacted with the Saudi Arabian government, US companies have supplied the largest amount of defense articles to the Saudi Arabian armed forces.

“With involvement from US companies in developing Saudi Arabia’s local defense expertise, Saudi Arabia’s labor productivity for manufacturing is anticipated to grow at one of the greatest long-term rates among industries, with a CAGR of 1.83 percent through 2030,” the report said.