Middle East Construction Costs to Rise 4% in Saudi Arabia and 3% in UAE in 2026
- brg_news_room
- 2 days ago
- 1 min read
Saudi Arabia/UAE: Construction costs across the Middle East are set to increase in 2026, rising around 4% in Saudi Arabia and 3% in the UAE. In Saudi Arabia, activity will continue under Vision 2030 despite some project rephasing, with 4% cost escalation driven by imported and specialist materials, strong demand for Tier 1 and Tier 2 contractors, and skilled labour shortages; data centres and digital infrastructure will see the highest increases at 6–8%, followed by high-end hospitality at 5–7%, while mid-market residential and infrastructure face moderate rises.
In the UAE, construction growth will be steadier with 3% escalation, as labour shortages and higher material prices pose risks, though stable procurement routes and long-term delivery models in sectors such as education and utilities offer support. Globally, costs are forecast to rise 2–6%, remain flat in China, and climb 10–12% in Japan, with risks including supply chain disruption, energy volatility, climate events, conflict and policy changes shaping market conditions, while executives highlight agility, early planning and flexible procurement as key to managing uncertainty.
Source: Trade Arabia
