Saudi Construction Tender Price Inflation Forecast to Reach 5% in 2026

JLL expects Saudi construction tender price inflation to reach 5% in 2026, up from its earlier forecast of 4%, and remain at that rate in 2027.

Higher material costs and supply disruptions are driving the rise in a market affected by geopolitical tensions and regional trade delays.

Copper prices were up 44.5%, aluminum 23.9% and diesel 7.9% by August, adding to the cost of projects that rely on metals and imported materials.

Delays in supplies are raising project schedule risks, while competition has led contractors to absorb some cost increases by accepting lower profit margins.

The construction sector is expected to grow moderately and steadily in 2026 and 2027, after years of rapid expansion.

In Riyadh, changes to fees on undeveloped land have helped increase the supply of land for development and ease price pressure.

Public-private projects in health, education and urban development continue to attract companies, helping sustain activity in the sector.