Building costs across Saudi Arabia and the UAE are expected to increase notably in 2025 due to ongoing supply chain problems and inflationary pressures. Saudi Arabia faces a 5 to 7 per cent rise in construction expenses, reflecting material shortages and higher labour costs. The UAE anticipates a smaller rise between 2 and 5 per cent but is impacted similarly by global supply disruptions and increased demand for construction inputs.
Industry Responses
This price inflation affects all construction sectors, from residential to infrastructure projects. Developers and contractors are adapting by adopting modular and prefabricated construction techniques to accelerate timelines and reduce on-site labour needs. Additionally, many are re-evaluating procurement strategies to secure materials earlier and at better prices, mitigating risks related to global market volatility and geopolitical tensions.
Market Challenges
The construction industry in the Gulf is bracing for these increased costs while deploying new technologies in project management and digital supply chain tracking to manage budgets and timelines effectively.
