Abstract
The study aims to estimate the total factor productivity in Saudi Arabia construction sector. Using Cobb Douglas production function. The results showed that that there is a long-run equilibrium relationship between the value of production and the factors of production labour and capital. The study also showed that the coefficient of labour is positive with a value of 0.015. While the elasticity of production with respect to capital is about 0.42 the elasticity of production with respect to the capital component is greater than the labour component and the construction sector in KSA operates in light of decreasing returns to scale (DRS). The results indicates that the construction sector in Saudi Arabia during the coming years will witness a positive growth rate with interest in strengthening the partnership between the government and the private sector in order to develop the construction sector. The study also recommends expanding the production process within the construction sector and moving towards research and development in the field of construction and working to increase investment in the human capital component by training employment and encouragement of investment, in addition to, loans facilitates to the construction sector.