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Saudi Arabia's Construction Activity Slows in July Amid Easing Non-residential Growth

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Saudi Arabia's Construction Activity Slows in July Amid Easing Non-residential Growth

Saudi Arabia's construction growth moderated in July as a slowdown in non-residential building activity offset broader sector gains, according to alrajhi capital and S&P Global's business survey data released Thursday.

The headline seasonally adjusted alrajhi capital Saudi Construction Index edged down to 55.2 from 56.3 in June. Still, the reading showed Saudi construction activity expanding for a third straight month and marked the second-highest level since the survey's launch in January.

Government-backed transport and utility projects led to infrastructure activity growing at the quickest pace in 2026 so far, while robust demand for urban projects and improving market conditions supported the residential sector's expansion. Meanwhile, despite losing momentum in July, non-residential activity still registered its second-highest growth rate since February.

Amid broad-based sector growth, total new work climbed to a five-month high, with new orders in the residential sector increasing at a "particularly strong" pace. Against this backdrop, job creation restarted in July, while input procurement rose for the second consecutive month.

"Looking ahead, business confidence strengthened to its highest level since the survey began, supported by easing geopolitical tensions, a recovery in new contracts and increasing public-private partnership opportunities. These factors continue to provide a positive backdrop for Saudi Arabia's construction sector," alrajhi capital's Head of Research Sultan Altowaim said.

Around 48% of the surveyed companies expect business activity to rise over the next 12 months, contrasting with the 4% that anticipate a decline.

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