Madinah's logistics sector grows 190% amid $57bn development push
The 190 percent growth over the period also translates to an average annual increase of 38 percent, according to a recent economic report issued by the Madinah Chamber of Commerce and Industry.
The analysis, also published by the Saudi Press Agency, emphasized that this expansion reflects growing investor interest and highlights the effectiveness of the region's investment environment, as well as the local market's capacity to accommodate increased activity in transport and storage.
It also further affirmed the sector's pivotal role in supporting commercial, industrial, and tourism-related activities in the region.
Madinah's emergence as a logistics hub is underpinned by a well-developed infrastructure network, including three airports, an extensive highway system linking five regions, the Haramain High-Speed Railway, and two key ports — one commercial and the other industrial. This strategic connectivity facilitated nearly $1.1 billion in non-oil exports and over SR5.25 billion ($1.40 billion) in imports in 2021.
The region's broader economy has also shown significant momentum, with the hotel sector recording a 42 percent year-on-year increase in 2024, and tourism-related enterprises, such as organized travel and tour services, expanding by 33 percent.
'The sector's accelerating activity coincides with the implementation of major development projects in Madinah, with a total estimated value exceeding SR213 billion,' SPA stated.
It added that these projects span multiple sectors, including infrastructure, urban expansion, and tourism services, as well as the Madinah humanization initiative, and transport and logistics, noting that these initiatives aim to streamline supply chain operations and enhance connectivity between development sites within and beyond the city.
The report further stated that the rise in commercial registrations also signals growing interest from investors and entrepreneurs in this field, which serves as a central link in production and distribution chains.
'It provides a favorable environment for the development of logistics services and the advancement of modern transport capabilities.' SPA report added.
The news agency concluded that these indicators confirm that the transport sector has become an integral component of Madinah's economic structure, contributing to the integration of development projects and supporting stability and growth in the local market.
An earlier report by the region's chamber on the first quarter of 2025, released in May, highlighted positive transformations in the area's economy. The region's gross domestic product reached SR57.6 billion in the third quarter of 2024, reflecting a 2.8 percent growth compared to the same quarter of the previous year.
Madinah also recorded the second-highest growth rate in local demand at 11 percent, based on point-of-sale transactions, following Riyadh.
The first quarter report revealed a drop in the region's unemployment rate to 8.4 percent in the fourth quarter of 2024, down from 10.3 percent in the previous period, as employment rose to over 458,000, with economic activity concentrated in construction, trade, and manufacturing.
The study also revealed progress in major development projects across the Madinah region, with around 213 projects under implementation, valued at over SR210 billion.
'These include 188 private sector projects and 15 government projects. The total investment land area allocated for these projects exceeds 15 million sq. meters, with expectations of generating over 119,000 future job opportunities,' the release stated.
It added that the commercial sector accounted for the largest share of these projects, with 153 developments, followed by 27 mixed-use residential-commercial undertakings.
Other initiatives spanned the healthcare, education, tourism, and religious sectors.
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