RIYADH: Stable prices for materials and equipment rentals helped construction costs in Saudi Arabia maintain a steady annual rise of 1.1 percent for the second consecutive month in December.

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. 

The steady momentum in the Kingdom’s construction sector comes as Gulf Cooperation Council 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 29 percent 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 1.1 percent increase in December 2025, maintaining the same growth rate recorded in November 2025. This increase is mainly attributed to a 1.1 percent rise in construction costs for the residential sector and a 1.1 percent rise in construction costs for the non-residential sector, primarily costs.”  

In the residential sector, labor costs rose by 1.7 percent in December compared to a year earlier, while expenses for renting equipment and machinery increased by 1.3 percent. Energy prices recorded a sharp year-on-year rise of 9.9 percent. 

Prices of basic materials edged up by 0.2 percent, reflecting a 1.2 percent increase in cement and concrete costs and a 0.9 percent rise in plastic and glass products. 

In the non-residential sector, labor costs increased by 1.5 percent year on year, while expenses for renting equipment and machinery rose by 1.3 percent. Basic material costs climbed by 0.3 percent, driven by a 2.7 percent increase in wood and carpentry prices and a 1.7 percent rise in plastic and glass products. Energy prices also rose by 9.9 percent. 

“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, labor, equipment and machinery rental, and energy recorded no significant changes compared to November 2025,” added GASTAT. 

By contrast, non-residential sector costs increased by 0.1 percent month on month, driven by a 0.3 percent rise in labor 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.