Construction is weathering a tougher pricing environment in 2026, with prices rising up to 71% compared to last year

Prices of building materials have surged over just the past two weeks, with increases ranging between 1.5% and 14% between the end of April and mid-May, according to data compiled by Al Khaleej.

Pressure from both the supply and demand sides drove the surge: The UAE’s real estate and infrastructure boom is colliding with war-linked shipping disruption and strained contractor capacity. Disruptions through the Strait of Hormuz led to a supply chain bottleneck and increased shipping costs, just as the UAE is also registering an uptick in the number of infrastructure, residential, and commercial projects, with high demand outpacing the short supply of construction materials.

The pressure is spreading across the construction stack: Reinforced concrete prices are now up 50% since the end of 2025, hollow bricks have jumped 71%, while electrical materials, insulation, paints, and wood all posted double-digit increases this year. Crane and lifting services also climbed 14.3%, while cement prices rose 8.3% as contractors grapple with higher shipping costs and supply bottlenecks.

Construction hasn’t taken a break

While construction did see awards fall 39.9% y-o-y to USD 7 bn in 1Q 2026, as we’ve reported recently, several major construction contracts were awarded earlier in the second quarter, and many real estate developers said construction on projects is moving ahead as planned, without delays.

Yes, but… There have been some reports of delayed shipping and supply chain disruptions weighing on developers’ project timelines, including Wynn Resorts, which said its planned opening date for the USD 5.1 bn Wynn Al Marjan Island project in Ras Al Khaimah (RAK) would be pushed back. The CEO of Wynn Resorts cited stretched timelines due to rerouted materials and alternative sourcing, which he said has added to costs.

That’s exactly why the UAE is laser-focused on building a local supply of key materials…

We recently covered Bildco’s plans to add 1 mcm of concrete capacity in Abu Dhabi as developers and suppliers race to keep up with surging construction demand. The government has also been working on a list of 150 key commodities that will fall within the scope of a new National Supply Chain Resilience Program, which are set to include industrial goods.