RIYADH: Saudi Arabia’s Construction Cost Index rose 2.4 percent year on year in April, driven by higher equipment rental and labor costs, with both residential and non-residential sectors recording increases, official data showed.
According to the General Authority for Statistics, residential construction costs climbed 2.4 percent annually, while the non-residential sector witnessed a price rise of 2.7 percent.
The increase comes as Saudi Arabia presses ahead with large-scale infrastructure and tourism developments under its Vision 2030 diversification strategy, including Neom, Qiddiya and the Red Sea Project, which continue to drive demand for contractors, machinery and building materials.
“CCI for the residential sector recorded an annual increase of 2.4 percent as a result of a 4.7 percent rise in the cost of renting equipment and machinery, driven by a 6.3 percent increase in the rental of equipment and machinery with operators,” said GASTAT.
This increase in construction costs comes amid signs of moderation in Saudi Arabia’s real estate market, particularly in the residential sector. The Kingdom’s real estate price index declined 1.6 percent year on year in the first quarter, largely due to a 3.6 percent drop in residential property prices.
