Construction costs in the Kingdom continued to rise at a remarkable pace during April 2026, reaching the highest annual rate of increase since the General Authority for Statistics (GASTAT) started issuing the current time series of the index in early 2024.
The General Authority for Statistics data showed that the construction cost index in Saudi Arabia increased by 2.4% during April 2026 compared to the same month of 2025, bringing the index to 103.This rise is the highest since the beginning of the time series available for the index, which the authority began publishing as of January 2024, reflecting the escalation of pressures on the construction sector in recent months.The year-on-year increase was mainly driven by a 2.4% increase in construction costs in the residential sector, along with a 2.7% growth in construction costs in the non-residential sector."
The Construction Cost Index is a relative index that measures changes in the costs of building materials and construction services between two time periods and is used as a leading indicator by planners, researchers and those involved in the development and production sectors.
The Construction Cost Index is a key indicator for planners, researchers and those involved in the development and production sectors.
Upward trend during 2025 and 2026
The data showed the continuation of the upward trend of the index over the past months, as the year 2025 started at 101 points in January with an annual growth rate of 1%, before gradually moving during the rest of the year between 101.1 and 101.With the start of 2026, the pace of the rise accelerated more clearly, with the index recording 102.4 points in January and 102.5 points in February, then jumping to 103.2 points in March with a growth rate of 2%, before reaching 103.7 points in April, recording the highest annual increase of 2.4%.
With the start of 2026, the index accelerated to 102.4 points in January and 102.5 points in February, then jumped to 103.2 points in March with a growth rate of 2%, before reaching 103.7 points in April, recording the highest annual increase of 2.4%.
Equipment and energy lead the increase
According to the authority's data, the annual rise in construction costs last April was the result of a 5.1% increase in equipment and machinery rental costs, the highest among the index components, along with a 3% increase in energy costs and a 2.8% increase in labor costs.Prices of basic materials, which account for the largest weight within the index at 48.5%, increased by 1.2% compared to the same period last year.
The basic materials section rose from 99 points in April 2025 to 100.1 points in April 2026, while the labor index rose from 102 to 104.9 points. The equipment and machinery rental index climbed from 102.3 to 107.6 points, while the energy index rose from 131 to 134.9 points.
Residential sector continues to put pressure on the market
The construction cost data by sectors showed that the residential sector, which represents the largest weight in the index at 77.5%, continued to rise, recording an annualized growth of 2.4% during April 2026 compared to the same month of the previous year.
The increase in the residential sector was mainly driven by a 4.7% rise in equipment and machinery rental costs.Energy costs increased by 3%, labor by 2.8%, and basic materials by 1.2%.
The residential sector index rose from 101.3 points in April 2025 to 103.7 points in April 2026, the basic materials index climbed from 99.1 to 100.3 points, and the equipment and machinery index jumped from 102.4 to 107.2 points.
The residential sector index rose from 101.3 points in April 2025 to 103.7 points in April 2026, while the basic materials index rose from 99.1 to 100.3 points, and the equipment and machinery index jumped from 102.4 to 107.2 points.
Non-residential sector records higher growth
In contrast, the non-residential sector recorded a higher rate of increase of 2.7% year-on-year, mainly driven by the big jump in equipment and machinery rental costs which rose by 6.7%.
The non-residential sector also saw energy and labor costs increase by 3% each, along with basic materials rising by 1%.
Non-residential sector also saw an increase in energy and labor costs by 3% each, along with an increase in basic materials by 1%.
The non-residential sector index rose from 101 points in April 2025 to 103.7 points in April 2026, while the equipment and machinery index climbed from 102.2 to 109 points, and the labor index rose from 102.1 to 105.1 points.
