The Kingdom’s Construction Cost Index (CCI) rose 1.1% y-o-y in June 2025, due to a 1.2% annual rise in construction costs for the residential sector and a 1% increase for the non-residential sector, according to data (pdf) from the General Authority for Statistics.

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Labor and machinery drove costs up: The cost of residential activity — which makes up 77.5% of the index — increased as a result of a 2.5% increase in labor costs and a 2.6% rise in rental prices of equipment and machinery. Meanwhile, costs of non-residential activity inched up due to a 2.1% increase in labor costs and a 2.3% rise in rental prices of equipment and machinery.

What went up: Energy costs jumped 9.9% y-o-y, mainly due to a 27.3% increase in diesel fuel prices. Similarly, rental prices of equipment and machinery increased by 2.5%. Labor costs also went up by 2.4%, driven by a 6.3% rise in wages for general laborers.

.. and what went down: The cost of basic materials decreased by 0.7%, influenced by a 1.9% drop in other building materials prices and a 1.9% decrease in wood and carpentry prices.

On a monthly basis, construction costs in June remained stable compared to May, with no significant changes in either residential or non-residential activity. Minor fluctuations included a 0.1% rise in both labor costs and rental prices of equipment and machinery. Meanwhile, the costs of basic materials dipped 0.1%, driven by a 0.4% decrease in metal product prices.

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