STABLE prices for materials and equipment rentals helped construction costs in Saudi Arabia maintain a steady annual rise of 1.1 per cent for the second consecutive month in December, reports the Arab News.
The kingdom’s Construction Cost Index stood at 101.8 points in December, flat from November on a monthly basis and matching the year-on-year increase recorded the previous month, according to the General Authority for Statistics (GASTAT).
The steady momentum in the kingdom’s construction sector comes as GCC economies continue efforts to diversify away from hydrocarbons.
The data comes as Saudi Arabia presses ahead with large-scale development projects tied to its economic diversification agenda.
Real estate consultancy Knight Frank has forecast the kingdom’s construction output value to reach $191 billion by 2029, a 29pc increase from 2024, supported by residential development, giga-projects and growing demand for office space.
In its latest report, GASTAT stated: “The CCI recorded a 1.1pc increase in December 2025, maintaining the same growth rate recorded in November 2025. This increase is mainly attributed to a 1.1pc rise in construction costs for the residential sector and a 1.1pc rise in construction costs for the non-residential sector, primarily costs.”
In the residential sector, labor costs rose by 1.7pc in December compared to a year earlier, while expenses for renting equipment and machinery increased by 1.3pc. Energy prices recorded a sharp year-on-year rise of 9.9pc.
Prices of basic materials edged up by 0.2pc, reflecting a 1.2pc increase in cement and concrete costs and a 0.9pc rise in plastic and glass products.
In the non-residential sector, labour costs increased by 1.5pc year on year, while expenses for renting equipment and machinery rose by 1.3pc. Basic material costs climbed by 0.3pc, driven by a 2.7pc increase in wood and carpentry prices and a 1.7pc rise in plastic and glass products. Energy prices also rose by 9.9pc.
“CCI remained stable in December 2025 compared to November 2025, mainly due to the stability of the residential sector, where the costs of basic materials, labour, equipment and machinery rental, and energy recorded no significant changes compared to November 2025,” added GASTAT.
By contrast, non-residential sector costs increased by 0.1pc month on month, driven by a 0.3pc rise in labour expenses, while prices of basic materials, equipment and machinery rental, and energy remained broadly unchanged.
The CCI tracks changes in construction input costs across 51 items, with prices collected monthly from 13 regions through field surveys of contractors, engineering offices and construction material suppliers. The base year for the index is 2023, and it is published on a monthly basis.
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