Business activity across the Saudi construction sector gained considerable momentum in June, supported by stronger performances across residential, non-residential structures (office/commercial, institutional, industrial) as well as infrastructure (transportation, energy/utilities), said Al Rajhi Capital, a leading financial services provider in Saudi Arabia, in its latest Saudi Construction Index.
At 56.3 in June, up sharply from 51.2 in May, the headline seasonally adjusted Alrajhi Capital Saudi Construction Index posted above the crucial 50 no-change mark for the second month running.
Moreover, the latest reading signalled the fastest rate of construction output growth since the survey began in January.
Survey respondents widely commented on a swift upturn in activity during June due to new project starts, greater regional stability and the normalisation of business operations.
Rebound has been seen across all three main areas of construction work with the residential construction activity remained the best performing segment in June, with growth accelerating to its strongest in 2026 to date (index at 58.4), it stated.
Many firms noted a boost from improved investor sentiment and ongoing public sector support for new residential projects. The June data also highlighted a robust upturn in work on nonresidential structures (index at 55) and the pace of expansion.
“The June reading of the Alrajhi Capital Saudi Construction Index points to a clear acceleration in sector momentum, with the headline index rising to 56.3 from 51.2 in May, the strongest expansion since the survey began," remarked Sultan Altowaim, the Head of Research at Alrajhi Capital.
“The improvement was broad-based across residential, non-residential and infrastructure activity, supported by a rebound in new orders, the restart of delayed projects, and a more stable operating environment. Residential construction remained the strongest-performing segment, while non-residential and infrastructure activity also returned to healthier growth,” he noted.
“Encouragingly, business expectations improved sharply, with the 12-month outlook reaching its highest level since the start of the survey. That said, cost pressures remain an important area to monitor, particularly with firms reporting higher prices for key materials such as aluminium, steel and electrical equipment,” he added.
The key findings of the survey were:
•Construction activity picks up for second month running
•Robust improvement in new order intakes and
•Year ahead growth outlook highest since survey began in January
Alrajhi Capital said the June data also highlighted a robust upturn in work on nonresidential structures (index at 55.0) and the pace of expansion reached its highest since February.
Construction companies typically noted healthy pipelines of work on commercial and industrial projects, supported by resilient domestic economic conditions and a more favourable demand outlook.
Business activity in the infrastructure segment meanwhile returned to growth in June (index at 53.6). Higher levels of activity were attributed to increased workloads linked to utilities and transportation projects, alongside ongoing support from Vision 2030 investment spending, stated Altowaim.
New work received by construction firms rebounded further in June. The latest improvement was the fastest sincae February and reflected strong rises in new orders across all major segments.
Anecdotal evidence often cited a general recovery in market conditions due to reduced geopolitical tensions and strong demand fundamentals, especially rapid urban growth and infrastructure development plans, he added.-TradeArabia News Service