Real estate consultancy JLL has raised its forecast for construction tender price inflation in Saudi Arabia this year to about 5%, from 4% previously.
The revised 2026 forecast sits in a range of 4% to 6%, JLL said in its Saudi Arabia Construction Market Review for the first half of 2026, released on Tuesday.
JLL expects tender price inflation to stay at about 5% in 2027, within the same range.
Cost increases were concentrated in metal-intensive trades that depend on imports, the report said. Copper prices rose 44.5% in the year to August 2026, aluminum 23.9% and diesel 7.9%.
Regional geopolitical tensions have disrupted trade routes and pushed up commodity prices, JLL said. Imported materials and equipment face longer delivery times, which create scheduling risks for projects.
Contractors are absorbing part of the higher costs through thinner margins because tendering remains highly competitive, the report said. That has kept realized inflation from rising further.
JLL said the sector is moving to a more measured pace of growth in 2026 and 2027 after years of record activity.
Riyadh’s revised White Land Tax is speeding up construction and encouraging development of unused plots, according to the report.
“We are seeing an evolution in Saudi Arabia’s construction sector as it transitions from hyper-growth to a mature, sustainable phase,” Maroun Deeb, JLL’s head of project and development services for the Middle East and Africa, said in a statement.
JLL said public-private partnerships in healthcare, education and urban development are drawing a mix of local and international companies.
