Saudi build costs rise 2.26% in a year, led by equipment hire

Saudi construction costs rose 2.26% in the year to July 2026. GASTAT's construction cost index read 103.99 that month, on a 2023 = 100 base (GASTAT, released 18 August 2026). That is only 3.99% above the base, three years on.

Equipment and machinery rental moved fastest. Much of that plant-hire increase looks like a wage, because GASTAT prices machines both with and without an operator. On our reading, 43.55% of the index sits on prices that include pay, so Saudi wage growth reaches build costs through more than the labour line.

Key figures at a glance

What the index measures, and the weights people misread

The index tracks four blocks of inputs on a basket fixed in 2023. Basic materials carry 48.52% of the weight and labour 29.93%. Equipment and machinery rental takes 19.01% and energy 2.54% (GASTAT, Table 2). Residential building makes up 77.45% of the index and non-residential the other 22.55%.

Land, design fees, preliminaries, overhead, profit and finance are all left out. Nothing in it converts to a riyal per square metre. It also covers buildings only (GASTAT CCI FAQ), so roads, utilities and giga-project earthworks fall outside it.

The most common mistake starts on the Summary sheet that opens every workbook. It shows a second set of weights that add up to 77.45, the residential weight (GASTAT, July 2026 Summary sheet). They are residential sections shown as shares of the whole index. Read them as the material content of Saudi construction and the material share is out by eleven percentage points.

The same sheet is behind the familiar line that Saudi build costs are a labour story. Its April 2026 figures, labour +2.75% and materials +1.21%, are residential rates. For the whole index the pair was +2.81% and +1.16% (GASTAT, April 2026).

GASTAT's methodology names the formula both as a "Laspeyres equation" and a "Geometric Laspeyres Formula" (GASTAT). Its own numbers settle it: weighting the four July 2026 section indices geometrically reproduces the published 103.99, while an arithmetic weighting gives 104.13.

Plant hire drives the increase

Equipment and machinery rental rose 4.53% in the twelve months to July 2026. Materials rose 1.80% and labour 1.51% (GASTAT, Table 2). Plant hire was also the fastest section in the April print, at +5.12%. Labour's rate peaked that month at 2.81%.

Because the index is geometric, it splits exactly into each section's contribution to the headline rate.

Materials added slightly more in July, but on 48.52% of the index against 19.01% for plant hire. In April, with labour at its high for the year, plant hire still added more to the headline than labour did.

Some labour costs are falling. Of the ten labour lines GASTAT prices each month, two were cheaper in July than a year earlier: general labourer at minus 0.35% and builder at minus 0.47% (GASTAT, Table 2).

The operator premium puts a wage in 43.55% of the index

GASTAT prices the same five machines twice, hired with an operator and without. In the year to July 2026 the operated rate rose faster for all five, by 1.53 to 8.04 percentage points. Most of the plant-hire weight sits on the operated rates (GASTAT, Table 2).

These are ten published rows in Table 2 of the July 2026 workbook. The April print showed the same pattern for all five machines, with wider gaps.

Omran inference, not a GASTAT statement. The split and the twenty rates are GASTAT's. Reading the difference as the operator's pay is ours. On that reading, labour (29.926%) and with-operator hire (13.626%) together put 43.55% of the index on prices containing a wage. Materials carry 48.52%. Tracking Saudi pay exposure through the Labour section alone understates it by about a third. The gap could also hold bundled fuel, contract length or a different rental segment. It holds for all five machines in two prints, but it remains an inference.

Escalating a benchmark without a SAR per sqm rate

No permitted source publishes a construction cost per square metre in Saudi Arabia, for any grade or city. GASTAT publishes an index with no price level behind it. REGA publishes property prices and rents. MOMRAH and NHC publish neither, and none of the three publishes build costs.

Omran escalation method. Take a dated benchmark you already hold. Multiply it by the CCI general index in the target month divided by the index in the benchmark month, both from the same table. On the Table 2 and Summary values, a rate priced in July 2025 escalates to July 2026 by a factor of 1.022582. Table 3 of the same workbook carries a slightly different July value, so the clause must name its table and stick to it. If the package does not look like the national basket, escalate each cost block on its own section index and re-weight to the project's cost plan. Call the result an Omran-method escalation, never a published rate. It feeds the build-cost line of a residual land value and the denominator of a yield on cost.

Costs move in steps. On Table 5, plant hire rose 2.892% month on month in March 2026 and 0.956% in January, and barely moved in the other months of the year. Labour resets each July, and energy moves only in January (GASTAT, Table 5). A twelve-month change mostly reflects three or four of these jumps.

Past values get revised. December 2025 was first published at 101.795554 and now reads 101.853216 (GASTAT, December 2025 against the July 2026 file), so a January 2026 escalation of +1.095% is +1.152% today. The methodology caps revisions at three months, yet the February 2026 workbook, released 17 March 2026, revised May 2025, nine months after the reference month. A contract should name the release it relies on.

Most packages will not look like the national basket either. Cement roof tiles and ceramic wall brick are both weighted items (GASTAT, Table 2), and a civils job buys neither. GASTAT's metadata lists an "index for specialized construction activities", but no release contains one, so nothing public prices Saudi infrastructure.

The costs this index leaves out

Land is not in the basket at any level. GASTAT prices it separately, on the same base year. Its Real Estate Price Index put residential plots at 107.65 in Q2 2026, up 6.3% year on year (GASTAT REPI Q2 2026, released 19 July 2026). Because 70.6% of REPI by weight is bare land, compare sub-index with sub-index.

Omran arithmetic. Averaging the monthly CCI values for April, May and June 2026 gives a Q2 2026 mean of 103.8537. That is 3.85% above the 2023 base and 2.58% above the Q2 2025 mean of 101.2416, which is the right comparison against a quarterly series.

Over that quarter, land rose 6.3% against 2.58% for the whole input basket (Riyadh land prices by district, Saudi real estate price index).

The villa line points the other way. It read 94.89 in Q2 2026, down 9.7% year on year and 5.11% below the base. So finished villas trade below their 2023 prices, while the inputs to build one cost 3.85% more. That squeezes developers on sale value and build cost at once. One caveat: the villa line covers transactions of all ages and locations, not new-build prices.

GASTAT collects prices in all 13 administrative regions but publishes no regional index (GASTAT methodology), so Riyadh and Tabuk share one national number. REGA's platform mirrors this series rather than producing its own (REGA).

Design fees, supervision and finance cost are missing, and so is any series before 2023. A benchmark priced during the 2020 to 2022 materials shock needs a labelled assumption before it can be escalated.

Nor is this a tender price. Etimad, the government procurement portal, listed 462,441 awarded competitions on 29 August 2026, cumulative, but bids cannot be opened without an account (Etimad).

We keep the monthly series, section and item detail, revision history and the workings above in one dated table. Ask for the monthly table behind this page or scope an escalation review against your own benchmark.

For the other public series, see our map of Saudi public property data.

FAQ

What is the Saudi construction cost index now, and when is the next print? 103.99 for July 2026 on a 2023 = 100 base, up 2.26% year on year, released 18 August 2026. The seven prints from December 2025 to July 2026 each landed between the 15th and the 21st of the following month. They are not consecutive, as no January 2026 file could be retrieved. On that pattern we expect the August print around 15 to 18 September 2026, though GASTAT has not committed to a date.

How much have Saudi construction costs risen since 2023? By 3.99% in total, roughly 1.3% a year, well below what the market tends to assume. On Table 4 of the July 2026 workbook, the annual rate stayed between 0.65% and 1.15% in every month of 2025. In the first half of 2024 it was negative for six months running, from minus 0.475% in January to minus 0.045% in June.

What is the construction cost per square meter in Saudi Arabia? No permitted source publishes one. Figures in circulation come from private cost guides, contractors' marketing pages or unattributed sites.

Can I write this index into a contract escalation clause? Yes, if the clause names the table and the release, for the reasons set out above. Never mix a level from one table with a rate from another.

Sources

• GASTAT, Construction Cost Index July 2026 workbook (index, sections, trades, Tables 2 to 5): link
• GASTAT, Construction Cost Index April 2026 workbook (April print, operator gaps, residential rates): link
• GASTAT, Construction Cost Index December 2025 workbook (revision evidence): link
• GASTAT, Construction Cost Index February 2026 workbook (dating the May 2025 revision): link
• GASTAT, Construction Cost Index June 2026 workbook (publication cadence): link
• GASTAT, Construction Cost Index page and FAQ (sector coverage, base year): link
• GASTAT, Methodology and Quality Report for the CCI (weights, formula, revision policy, regional coverage): link
• GASTAT, Real Estate Price Index Q2 2026 workbook (plot and villa sub-indices): link
• REGA, Real Estate Indicators Platform (GASTAT-sourced CCI panel, beta): link
• Etimad, public tender listing (462,441 awarded competitions, cumulative): link