Residential construction activity in Saudi Arabia remained the best-performing segment in June, with growth accelerating to its strongest in 2026 to date, Alrajhi Capital said in a survey.

The headline seasonally adjusted Saudi Construction Index reached 56.3 in June, up sharply from 51.2 in May, recording 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 projects, greater regional stability and the normalisation of business operations, Alrajhi Capital said.

Construction companies 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 returned to growth in June, supported by increased workloads linked to utilities and transportation projects, alongside ongoing support from Vision 2030 investment spending.

New work received by construction firms rebounded further in June, the fastest since February and reflecting strong rises in new orders across all major segments.

Business expectations improved sharply, with the 12-month outlook reaching its highest level since the start of the survey, said Sultan Altowaim, Head of Research at Alrajhi Capital.

However, cost pressures remain an important area to monitor, particularly as firms report higher prices for key materials such as aluminium, steel and electrical equipment, he added.

The previous release of the alrajhi capital Saudi Construction Index was in May 2026.

(Writing by P Deol; Editing by SA Kader)

(anoop.menon@lseg.com)

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