Saudi Arabia’s Construction Costs Rise 2.3% in July 2026

RIYADH, SAUDI ARABIA: Construction costs across Saudi Arabia increased 2.3% year-on-year in July 2026, driven by higher costs across both residential and non-residential construction, according to data from the General Authority for Statistics (GASTAT).

The latest Construction Cost Index (CCI) showed that the non-residential sector recorded the stronger annual increase at 2.6%, while residential construction costs rose 2.2% compared with July 2025.

Despite the annual increase, construction costs remained stable on a monthly basis, with the overall index unchanged from June across both residential and non-residential construction.

Residential Construction Costs Rise 2.2%

Within the residential sector, equipment and machinery rental costs recorded the largest annual increase, rising 4.2%.

The increase was mainly driven by a 5.7% rise in the cost of renting equipment and machinery with operators.

Energy costs increased 3% year-on-year, while basic materials were 1.8% higher and labour costs rose 1.4%.

Within basic materials, timber and joinery prices increased 3.9%, while the cost of other building materials rose 2.8%.

The figures indicate that equipment rental and energy remained among the more significant sources of cost pressure for residential construction during the period.

Non-Residential Costs Increase 2.6%

Cost growth was slightly stronger across Saudi Arabia's non-residential construction sector.

Equipment and machinery rental costs increased 5.8% year-on-year, led by a 7.3% rise in the rental cost of equipment and machinery with operators.

Energy costs increased 3%, while labour costs were up 1.8% and basic material costs also rose 1.8% compared with July 2025.

Within the basic materials category, prices for other building materials increased 4%, while timber and joinery costs rose 2.5%.

The figures show that equipment and machinery rental costs experienced the largest annual increases across both residential and non-residential construction in July.

Monthly Construction Costs Remain Stable

While costs remained above their levels from a year earlier, the Construction Cost Index was stable month-on-month in July compared with June.

Both the residential and non-residential sectors recorded stable costs over the month, indicating that the annual increase reflected cost movements accumulated over the previous 12 months rather than a further rise between June and July.

The latest GASTAT figures provide a measure of changing construction input costs as Saudi Arabia continues to advance residential and non-residential development across the Kingdom.