Saudi construction activity expanded for the first time in three months in May, driven by a sharp rebound in residential building. Infrastructure contracted.
Alpha Score of 54 reflects moderate overall profile with moderate momentum, moderate value, moderate quality, moderate sentiment.
The Al Rajhi Capital Saudi Construction Index, compiled by S&P Global, rose to 51.2 in May from 48.5 in April. That reading was the highest in three months and put the index back above the 50.0 threshold that separates expansion from contraction. The survey covers 200 construction companies selected to represent the sector's structure.
Residential building drove the rebound. That sub-index hit 53.8, the best performance since January. Firms linked the pickup to strong housing demand, a recovery in client confidence, and improved market dynamics after regional disruptions eased. Non-residential structures also expanded, with a sub-index of 50.5. That category has grown every month this year, supported by commercial and industrial project pipelines and a renewed improvement in investor confidence.
Infrastructure activity went the other way. The sub-index fell to 45.7, the first contraction since the survey began in January. Firms cited weak orders in recent months.
New orders returned to growth after two months of decline. The expansion rate was slower than in January and February. Survey respondents said underlying demand recovered in May, and sales pipelines continued to benefit from long-term diversification projects, Vision 2030 initiatives, and rapid urbanisation.
Supply chains showed some improvement. Delivery times for construction inputs shortened for the first time since February. Subcontractor availability improved at a faster pace. Some firms noted that ongoing shipping delays in the region disrupted deliveries of certain imported items. Higher transportation bills and raw material costs pushed input prices up at the sharpest rate since the survey began.
Business activity expectations rebounded after a dip in April. Around 30% of the survey panel forecast a rise in total activity over the next year. Only 16% predicted a decline. The reading was the highest in four months. Firms cited resilient demand, hopes of regional stability, and rising investment sentiment tied to large-scale public development projects.
The May data suggests the Saudi construction sector is recovering from a soft patch earlier in the year, though the pace remains below the start of 2026. The divergence between residential and infrastructure activity will be worth watching in coming months, especially as Vision 2030 projects continue to drive demand in other segments.
Prepared with AlphaScala editorial tooling from the source reporting linked above. Indexable analysis may include a cited Alpha Score value. Publishing checks screen each story before release. Educational coverage, not personalized advice.