Saudi Construction Costs Rise 2.2% in September

Construction costs in Saudi Arabia rose 2.2% year-on-year in September 2026, with the overall index holding steady compared with August,

Residential construction costs climbed 2.1% over the year, while non-residential construction costs rose slightly faster at 2.6%. The index is measured against a 2023 base year and is updated each month.

The data shows equipment and machinery rental was the fastest-rising input in both segments, increasing 4.1% for residential projects and 5.8% for non-residential projects. Energy costs rose 3.0% across both sectors.

Other inputs saw more modest increases. Basic-material costs went up 1.7% for residential building and 1.8% for non-residential building, while labour costs rose 1.5% and 2.0% respectively.

Why it matters

Construction costs feed directly into housing prices, rents, and the delivery of commercial and infrastructure projects. A moderate annual rise, combined with a flat reading month-on-month, points to relatively stable building conditions for developers and contractors.

For residents and businesses planning builds, renovations, or fit-outs, the figures suggest material and labour costs remain contained, while rising equipment-rental and energy costs are worth factoring into budgets for larger projects.

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