RIYADH: Saudi Arabia’s construction activity expanded for the fourth straight month in August, driven by resilient demand conditions and a sustained recovery in new orders, according to a new survey.  The seasonally adjusted alrajhi capital Saudi Construction Index, compiled by S&P Global Market Intelligence, climbed to 55.4 in August from 55.2 in July.  The index remained comfortably above the 50-point threshold separating expansion from contraction, marking its second-highest reading since the survey began in January.  Last month, a report released by the General Authority for Statistics revealed that the Kingdom’s Business Confidence Index eased marginally to 56.5 in July from 56.6 in June, while the construction industry recorded a reading of 57.7, compared with 54.7 for industry and 55.3 for services.    Sultan Al-Towaim, head of research at alrajhi capital said that activity increased in all three major segments in the construction industry, including infrastructure, residential and non-residential sectors, with “infrastructure recording its fastest rise in new orders since February.”  He added: “The operating environment remained supportive, with quantity purchased (by construction companies) rising at its fastest pace since the survey began, and suppliers’ delivery times improving for a fourth consecutive month.”  Residential sector leads growth  According to the report, residential activity was the fastest-growing area of construction for the third time in the past four months, with its index at 57.5. Firms attributed the stronger momentum to improving market conditions, new project starts and work on major urban development schemes.   Infrastructure activity expanded at a solid pace, with an index of 53.9. Although the rate of growth moderated from July, it remained stronger than any reading recorded in the first half of 2026. Supporting factors in the infrastructure segment included regional development, utilities investments, new roads and transport connectivity projects.  Activity in the non-residential sector also rose at a solid rate, posting an index of 53.5, driven by improving economic conditions and the restarting of projects, though some companies reported delayed decision-making and caution among clients.  New orders fuel expansion  Total new business received by Saudi construction companies increased sharply again in August.  Infrastructure was the best-performing category for new work, recording its fastest expansion since February. The residential segment followed closely, with new orders improving to the greatest extent since the survey began in January.  Stronger demand resulted in a rise in employment numbers in August. Purchasing activity increased at its fastest pace since the survey started in January. Supply conditions improved for a fourth consecutive month, even as demand for construction inputs grew and some firms continued to report international shipping delays.  Input price inflation picked up in August after slowing to a three-month low in July, driven by higher transportation costs and raw material prices, particularly for aluminum, copper and steel.  Business confidence  According to the report, companies were highly upbeat about the year-ahead outlook, with 42 percent expecting an upturn in overall business activity and only 7 percent predicting a decline. The level of optimism, however, was lower than in July.  Confidence was also positive on a three-month horizon and was strongest in the residential and infrastructure segments, supported by reports of improving sales pipelines and an upturn in new project starts.  “Although input cost inflation accelerated during August, firms remained optimistic about the outlook, supported by healthy project pipelines and expectations of continued activity growth,” concluded Al-Towaim.