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Saudi Construction Costs Jump 2.6% in May, Fastest Since 2024
Equipment rental costs surged 5.1% as the Construction Cost Index hit 103.9. Non-residential costs rose 3.0%, pressuring margins on fixed-price contracts.
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Saudi Arabia's Construction Cost Index rose 2.6% in May from a year earlier, the fastest pace since the General Authority for Statistics (GASTAT) began collecting the data in January 2024. The index hit 103.9 points (base year 2023), up from 101.3 in May 2025, GASTAT data showed.
The biggest driver was equipment and machinery rental costs, which surged 5.1% year-on-year. Energy costs climbed 3%, and labor costs rose 2.6%. Core materials, which carry the largest weight in the index at 48.5%, increased a more modest 1.6%.
Breaking it down by sector: residential construction costs (77.5% of the index) rose 2.5%, pushed by equipment rental (+4.7%), energy (+3%), labor (+2.5%) and basic materials (+1.6%). Non-residential costs increased 3.0%, with equipment and machinery rental jumping 6.7% – the sharpest sub-component move in the report. Energy and labor each added 3%.