Saudi Construction Costs Rise 2.3% in July As Equipment Rentals Climb

RIYADH: Saudi Arabia’s construction costs rose 2.3 percent year on year in July, driven by higher equipment and machinery rental charges across residential and non-residential projects, official data showed. 

The Construction Cost Index, published by the General Authority for Statistics, showed residential costs increasing 2.2 percent annually, while non-residential costs rose 2.6 percent. The overall annual growth eased from 2.7 percent in June but remained above the 0.7 percent recorded in July 2025. 

The latest increase in the Kingdom’s construction costs comes as the nation continues to advance major housing, infrastructure and development projects under Vision 2030. 

“CCI remained stable in July 2026 compared to June 2026,” the report said, attributing the monthly result to unchanged overall costs in both the residential and non-residential sectors. 

Rental costs lead increases 

Equipment and machinery rental costs in the residential sector increased 4.2 percent, mainly because the cost of hiring equipment with operators rose 5.7 percent. 

Residential labor costs increased 1.4 percent, while energy prices rose 3 percent. Basic material costs climbed 1.8 percent, reflecting increases of 3.9 percent in timber and joinery prices and 2.8 percent in other building materials. 

The increase was more pronounced in the non-residential sector, where equipment and machinery rental costs rose 5.8 percent. This was driven by a 7.3 percent climb in the cost of renting equipment and machinery with operators. 

Non-residential labor costs increased by 1.8 percent, and energy costs rose by 3 percent. Basic materials were also 1.8 percent more expensive, as other building material prices climbed 4 percent and timber and joinery costs increased 2.5 percent. 

At the component level, labor costs increased 0.1 percent month on month in both sectors, while rental costs for residential equipment and machinery also rose 0.1 percent. 

Broader price context 

The Kingdom’s annual consumer inflation stood at 1.8 percent in July, according to a separate release from GASTAT, compared with the 2.3 percent annual increase in the construction cost measure. 

The CCI tracks 51 construction inputs, with prices collected monthly across 13 regions through field visits to contractors, engineering offices and construction material sales establishments. The index uses 2023 as its base year.