Saudi Construction Costs Rise 2.3% in August 2026

Construction costs in Saudi Arabia continued to climb in August 2026, with the national Construction Cost Index rising 2.3% compared with the same month a year earlier. The index reached 104.0 points, up from 101.8 points in August 2025, reflecting steady upward pressure on the cost of building across the Kingdom.

The increase was broad-based. Residential construction costs rose 2.1% year-on-year, while non-residential construction costs climbed 2.6%. On a monthly basis, the index edged up just 0.1% from July 2026, pointing to a more moderate pace of change in the short term.

What drove the increase

For residential projects, labour was the biggest contributor, rising 5.1% over the year. Equipment and machinery rentals increased 4.1%, energy costs rose 3.0%, metal-product prices went up 2.0%, and basic materials added 1.8%.

In the non-residential segment, equipment rentals with operators led the rise at 7.2%, followed by equipment and machinery rentals at 5.8%. Other construction materials increased 4.3%, energy 3.0%, timber and carpentry 2.1%, labour 2.0%, and basic materials 1.8%.

For residents and businesses, the figures matter because higher construction costs can feed into housing prices, rents, and the budgets of commercial and infrastructure projects. It is worth noting that these are percentage changes in a cost index, not new government fees or fixed charges in Saudi riyals. The reported index does not introduce any new construction-permit fee, validity period, application step, or change to official channels.

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