The latest official data issued by the General Authority for Statistics in the Kingdom of Saudi Arabia showed that the construction cost index recorded a notable increase of 1.1% during December 2025, compared to the same period of the previous year, 2024. This data reflects price changes in construction production inputs in the Saudi market.
Index details and record figures
According to the statistical report, the general index of construction costs rose to 101.8 points during last December, based on the base year 2023, compared to 100.7 points recorded in December 2024. The authority attributed this rise to the parallel increase in construction costs for both the residential and non-residential sectors, as each recorded an increase of 1.1%, indicating consistent growth in costs across different types of construction projects.
Engines of growth: Energy and labor take center stage
Detailed data revealed that the increase was not uniform across all components, with energy costs significantly by 9.9%, making it the most influential factor in the index. This was followed by a 1.7% rise in labor costs and a 1.3% increase in equipment and machinery rental costs, while basic materials saw a slight increase of 0.2%.
On a sectoral level, the residential sector was directly affected by the rise in labor wages and equipment costs, which also extended to the non-residential sector, which recorded an increase in labor costs of 1.5%, in addition to the significant impact of energy prices, which rose by 9.9% in both sectors.
Economic context and the importance of the index
This report is particularly important given the massive economic and urban development taking place in Saudi Arabia in line with Vision 2030. The Kingdom is witnessing the implementation of mega-projects and large-scale infrastructure projects, making monitoring construction costs vital for investors, real estate developers, and contractors to accurately estimate budgets and manage financial risks.
The Construction Cost Index (CCI) is a key economic indicator that measures changes in the prices of construction materials and related services. This slight and relatively stable increase (1.1%) helps reassure the market regarding inflation rates in the construction sector, despite the clear price pressures in the energy sector, which necessitates that companies operating in the sector adopt energy efficiency strategies to reduce operating costs.
