04 / 06 · Development costs
Saudi Development Cost Monitor
Look beyond the construction headline to materials, labour, equipment and energy, and understand how a project’s cost mix changes its exposure.
For developers, procurement teams and project managers
Free download · No sign-up required
Saudi Development Cost Monitor
October 2026
Data periods: Construction Cost Index: August 2026
At a glance
How much did Saudi construction costs rise in August 2026?
Saudi Arabia’s general Construction Cost Index rose 2.25% annually in August 2026, according to GASTAT. Equipment rental rose 4.45%, compared with 1.77% for basic materials and 1.60% for labour. A project’s exposure can therefore differ from the headline depending on its budget composition.
Source:GASTAT: construction
Budget composition matters more than one blanket uplift
The general index represents a defined statistical basket. A project budget has its own shares of materials, labour, equipment and energy. For a project with substantial equipment use, tracking that component may be more informative than applying the headline increase to every cost.
Source:GASTAT: construction
Equipment contracts warrant closer attention
Equipment rental with an operator rose 5.92% annually, compared with 0.84% without an operator in August 2026. This gap shows why the index category should match the actual contract line. The different rates do not by themselves establish the cause of an increase or make the two contract formats interchangeable.
Source:GASTAT: construction
An illustrative test of cost sensitivity
The PDF includes a hypothetical SAR 10 million August 2025 budget: 60% materials, 25% labour, 10% equipment and 5% energy. Applying the category annual changes produces an illustrative increase of about 2.06%, or approximately SAR 205,550. The weights are assumptions, not a real project budget.
Use the example to understand the effect of weighting, then return to the project’s quantities, supplier quotations and scope. The index alone does not capture land, financing, contractor margins and every delivery condition.
Source:GASTAT: construction
Construction cost movements by component
| Component | Annual change |
|---|---|
| Basic materials | +1.77% |
| Labour | +1.60% |
| Equipment rental | +4.45% |
| Energy | +2.98% |
Source:GASTAT: construction
Method and sources
The report uses GASTAT’s Construction Cost Index, with 2023 = 100. Osool’s scenario uses hypothetical weights and source rates before rounding. The index is not a quoted cost per square metre or an all-in development budget.
Public sources reviewed for the 4 October 2026 edition. Linked pages may subsequently update; the PDF retains this edition’s figures. Cover artwork is conceptual and does not depict verified projects.
- GASTAT: Construction Cost Index, August 2026
Official source workbook. Synthesis and interpretation by Osool.
Common questions
Can the index establish construction cost per square metre?
Not on its own. The index measures changes in a basket of inputs. A square metre cost requires a scope of works, specifications, quantities, location and current quotations.
Is the SAR 10 million example a project cost forecast?
No. It is an illustrative calculation with assumed weights showing how cost mix matters. The approximate SAR 205,550 increase applies only to that example; it is neither a contractor quote nor a forecast for a particular project.
