Saudi Arabia's Construction Activity Slows in September Amid Rising Input Costs, Client Decision Delays

04:49 AM EDT, 10/07/2026 (MT Newswires) -- Saudi Arabia's construction activity rose for a fifth straight month in September, though growth slowed to a four-month low amid accelerating input costs and delays in client decision-making. The seasonally adjusted alrajhi capital Saudi Construction Index ticked down to 54.4 from 55.4 in August, alrajhi capital and S&P Global said Wednesday. Amid robust demand for infrastructure and large-scale housing, transport and industrial development projects, construction companies in the kingdom logged a fifth consecutive month of new order growth in September, albeit at the slowest pace since May. According to alrajhi capital and S&P Global, anecdotal evidence indicated that regional instability led to commercial clients delaying project approvals. The latest survey found that infrastructure activity accelerated to its second-highest reading since the survey's launch in January, while housing activity rose sharply, though at a slightly cooler rate. As for work related to non-residential structures, the sub-sector registered a marginal gain, marking its weakest growth since May. Meanwhile, input costs reached a 2026 peak in September, with 45% of surveyed companies reporting increased input prices versus fewer than 1% that saw a decline. "Cost pressures increased, with input price inflation reaching its highest level since January, alongside a slight lengthening of delivery times. Nevertheless, subcontractor availability continued to improve and companies remained positive about their project pipelines. Around 34% of firms expect activity to increase over the next three months, compared with 8% anticipating a decline, pointing to continued growth despite a more challenging cost environment," alrajhi capital's Head of Research Sultan Altowaim said.