Saudi Construction Costs Rise 2.3% in August as Rental Costs Climb

The Construction Cost Index reached 104 points in August, compared with 101.8 points in the same month last year. Residential construction costs increased 2.1% annually, while non-residential costs rose 2.6%.

Residential construction costs rise

Residential labour costs recorded one of the strongest increases, rising 5.1% year on year in August.

Equipment and machinery rental costs increased 4.1%, including a 5.6% rise in the cost of renting machinery with an operator. Energy costs were up 3%.

Basic material costs increased 1.8%, with metal product prices rising 2%.

Equipment rental drives non-residential costs

Cost pressures were stronger in the non-residential sector, where equipment and machinery rental costs increased 5.8% from a year earlier.

Renting equipment and machinery with an operator rose 7.2%, while labour costs increased 2% and energy costs were 3% higher.

Basic materials rose 1.8%, including a 4.3% increase in other construction materials and a 2.1% rise in timber and joinery costs.

The figures come as Saudi Arabia continues to deliver major housing, infrastructure and development projects as part of its wider economic diversification programme.

Monthly construction costs edge higher

On a month-on-month basis, the overall Construction Cost Index increased 0.1% in August compared with July.

Residential and non-residential construction costs each recorded a 0.1% monthly increase. July’s index had been unchanged from June, while recording the same 2.3% annual increase.

GASTAT’s Construction Cost Index tracks price movements across 51 construction goods and services. Prices are collected monthly across Saudi Arabia’s 13 regions from contractors, engineering offices and businesses selling construction materials.