Saudi Arabia's Project Pipeline Hits $2.07 Trillion Amid Rising Construction Costs
Saudi Arabia's ambitious development plans under Vision 2030 have reached a milestone, with a total project pipeline valued at $2.07 trillion in the first half of 2026. This figure includes $1.23 trillion in construction and real estate projects, along with $940 billion allocated for power, transport, industrial, water, chemical, gas, and oil developments. The construction sector's output is projected to hit $190.4 billion in 2026, up from $179.4 billion in 2025, and is expected to grow to $250.2 billion by 2030.
The ongoing regional conflict is adding strain to the construction and development industry, causing shipping and supply-chain interruptions, elevated logistics costs, and uncertainty over project timelines. Faisal Durrani, Partner and Head of Research for the Middle East and North Africa at Knight Frank, noted that while the pipeline's magnitude demonstrates the Kingdom's development vision, the regional conflict has created a tougher delivery landscape. He cautioned that some projects may need rephasing or reassessment to remain commercially feasible.
Riyadh province dominated contract awards, accounting for 46% of the total $293.1 billion in construction, industrial, and transport contracts awarded from 2020 through August 2026. The report also highlighted significant increases in construction material costs, with reinforcing steel bar prices climbing by 24%, iron-binding wire by 19.6%, and aluminium by 13.9% from January to July 2026. These cost pressures are complicating procurement and delivery schedules, prompting developers to reassess project scopes and phasing.
Despite these challenges, Saudi Arabia's long-term development pipeline remains substantial, with approximately $1.3 trillion in planned real estate development. This includes over 1.15 million residential units, more than 358,000 hotel keys, roughly 7.35 million square meters of retail space, and over 7.9 million square meters of office space, with delivery stretching through to 2035. The report underscores the ongoing significance of construction and real estate to Saudi Arabia's economic transformation, though project timelines will depend on construction costs, procurement conditions, and the broader regional environment.