Saudi Arabia’s construction indicators are pointing in different directions because they measure different things. A monthly survey of construction firms showed continued expansion in August 2026, while the value of all-sector project awards fell over the first nine months compared with the same period in 2025. In September, surveyed firms also reported the fastest input-price inflation since that survey began—not a record in the government’s official construction-cost index.
What the latest indicators say
| Indicator | Latest reported result | What it measures |
|---|---|---|
| Saudi Construction Index | 55.4 in August 2026, up from 55.2 in July; above 50 for a fifth consecutive month | A survey signal of activity among firms, not a direct measure of construction output volume. (Al Rajhi Capital / S&P Global Market Intelligence, as reported by EnterpriseAM.) |
| All-sector project awards | USD 73.4 billion in January–September 2026, down from USD 79.5 billion in the comparable 2025 period | The value of awarded projects across sectors, as reported by EnterpriseAM using Kamco Invest figures based on MEED Projects data. |
| Surveyed input prices | Around 45% of firms reported higher input prices in September 2026; fewer than 1% reported a decline | Firms’ reported input-price experience. The survey described its measure of input-cost inflation as the fastest since it began in January; this is not an official economy-wide cost-index record. |
The three results can coexist. Surveyed firms can report that activity is expanding even as the total value of newly awarded projects declines, because activity may reflect work already underway and awards track new contracts. Rising input prices describe a separate pressure on project economics.
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Construction activity remained in expansion territory
The Al Rajhi Capital Saudi Construction Index reached 55.4 in August 2026, compared with 55.2 in July. In this survey, 50 is the dividing line: a reading above it signals expansion, while a reading below it signals contraction. August marked a fifth consecutive month above that threshold.
All three reported segments were above 50 in August: residential at 56.6, infrastructure at 55.8, and non-residential at 50.9. The figures indicate that surveyed firms generally reported expansion, not that every company or project grew by those percentages. New orders rose for a fifth month, but at the softest rate since May, according to the October 2026 report from EnterpriseAM.
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Awards declined year to date, but construction contracts rose in the third quarter
Saudi project awards totaled USD 24.4 billion in the third quarter of 2026. For the first nine months, the all-sector total was USD 73.4 billion, compared with USD 79.5 billion in the same period of 2025. EnterpriseAM attributed these figures to Kamco Invest using MEED Projects data.
The year-to-date decline does not mean every project category fell. Construction contracts were a bright spot in the third quarter: their reported value rose 7.6% year over year to USD 9.2 billion, according to the same EnterpriseAM report. This narrower construction-contract figure should not be confused with the all-sector award total.
A separate MEED Projects September 2026 report excerpt put new Saudi awards from January through August 14% below the prior-year period, with contracts on hold up 77% and cancelled contracts up 55%. Those figures cover a different period and reporting frame from the nine-month totals, so they are not directly interchangeable.
Monthly awards show continued activity, not a reversal of the trend
In June 2026, Saudi Arabia recorded more than SAR 29.5 billion in awards across 25 projects, according to the Saudi Press Agency, reporting the Saudi Contractors Authority. Construction accounted for 14 projects valued at more than SAR 20.6 billion. This earlier monthly snapshot illustrates ongoing awards activity; it does not establish that awards rose later in the year.
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Why the “2026-high” is about surveyed input prices
The September finding concerns input-price inflation reported by firms in the Al Rajhi Capital / S&P Global Market Intelligence survey. Around 45% said their input prices increased, while fewer than 1% reported a decrease. The survey described the pace of input-cost inflation as the fastest since it began in January.
That wording does not establish a record for Saudi Arabia’s official Construction Cost Index. The General Authority for Statistics lists monthly Construction Cost Index releases through July 2026; its statistics index does not show a September reading establishing an official 2026 high.
Material and residential cost estimates point to pressure on budgets
Knight Frank reported that selected material prices rose between January and July 2026: reinforcing steel bar by approximately 24%, iron-binding wire by 19.6%, and aluminium by 13.9%. Its residential construction cost estimates also rose across the comparisons it published:
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|---|---|---|
| Standard villa | SAR 3,800–4,400 per square metre | SAR 4,100–4,800 per square metre |
| High-end villa | SAR 5,500–8,000 per square metre | SAR 6,000–8,700 per square metre |
| Standard apartment | SAR 4,700–5,800 per square metre | SAR 5,100–6,300 per square metre |
| High-rise apartment | SAR 10,000 per square metre | Up to SAR 10,800 per square metre |
These are Knight Frank estimates, not official nationwide prices or a guarantee of what a specific project will pay. Actual costs depend on project design, location, specifications, procurement and timing.
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A large pipeline is not the same as secured construction work
Knight Frank’s H1 2026 review valued Saudi Arabia’s planned-or-underway project pipeline at USD 2.07 trillion, including USD 1.13 trillion in construction and real estate. Projects in that pipeline are at different stages: the headline value should not be read as the amount funded, awarded, actively being built or completed.
The consultancy forecast construction output of about USD 190.4 billion in 2026, compared with USD 179.4 billion in 2025, and about USD 250.2 billion by 2030. These are forecasts, not realized output figures.
Knight Frank also reported USD 293.1 billion in construction, industrial and transport contracts awarded between 2020 and August 2026. Riyadh province accounted for USD 135.4 billion, or about 46% of that total. This long-period cumulative figure has a different scope from the 2026 year-to-date all-sector award totals.
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Knight Frank identified regional conflict-related shipping and supply-chain disruption, higher logistics and input costs, and longer procurement lead times as risks to project delivery. It said developers may need to reconsider project scope, timing or phasing. These are the consultancy’s risk assessment, not confirmation that specific projects have been cancelled or delayed.
For contractors and developers, the practical distinction is between the size of the opportunity and the conditions for delivering it. A broad pipeline can support long-term demand, while a slower flow of new awards, more expensive materials and procurement delays can complicate near-term planning.
Quick Recap
How to read the mixed picture
- Expansion index: a monthly survey reading above 50 signals that surveyed activity is expanding; it is not a physical-output tally.
- Award value: quarterly or year-to-date contract awards track new work awarded, and can move differently from activity on existing projects.
- Input-price inflation: survey responses show the direction and pace firms report for costs; they are distinct from the official Construction Cost Index.
- Pipeline and forecasts: planned or underway project values and projected output describe potential and expectations, not completed or necessarily funded work.
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