$2.07 trillion — the value of Saudi Arabia's project pipeline as costs climb

Summary

• Saudi Arabia's planned and active projects reached $2.07 trillion in the first half of 2026, Knight Frank said.
• Construction and real estate account for $1.23 trillion, with Riyadh province taking 46% of awarded contracts.
• Steel bar prices rose 24% in seven months, pressuring budgets and delivery timelines across the pipeline.

The latest

The value of projects planned or under construction across Saudi Arabia reached $2.07 trillion in the first half of 2026, according to Knight Frank's latest Saudi Arabia Construction Landscape Review. Construction and real estate make up $1.23 trillion of that pipeline. The consultancy said regional conflict has made the delivery environment materially harder, raising material and logistics costs.

Details

• The breakdown: Of the $2.07 trillion pipeline, $1.23 trillion sits in construction and real estate, Knight Frank said. The remaining $940 billion spans power, transport, industrial, water, chemical, gas and oil projects, with individual schemes at widely different stages of planning and delivery.
• What is planned: Current plans cover more than 1.15 million residential units and over 358,000 hotel keys, according to the review. They also include roughly 7.35 million square metres of retail space and more than 7.9 million square metres of office space across the Kingdom.
• Sector output: Construction-sector output is forecast at about $190.4 billion in 2026, up from $179.4 billion in 2025, Knight Frank said. The firm projects output rising to around $250.2 billion by 2030, pointing to sustained activity through the second half of the decade.
• Riyadh dominates: Riyadh province accounted for $135.4 billion of awarded contracts, or roughly 46% of the national total, the review said. That figure includes $96.1 billion in construction contracts and $34.8 billion in transport contracts, keeping the capital at the centre of activity.
• Other regions: Some $293.1 billion in construction, industrial and transport contracts were awarded nationwide between 2020 and August 2026, according to Knight Frank. Makkah Province followed Riyadh with $48.1 billion, while the Eastern Province accounted for $39.9 billion.
• Material costs: Between January and July 2026, reinforcing steel bar prices rose about 24%, iron-binding wire 19.6% and aluminium 13.9%, the review said. Knight Frank linked the increases to budget pressure as supply-chain disruption and longer lead times already strain schedules.
• The warning: Faisal Durrani, Head of Research for MENA at Knight Frank, said rising construction and logistics costs and longer procurement timelines are squeezing project economics. He said some projects "may need to be rephased, revisited or reassessed" to stay commercially viable.
• On the ground: Mohamed Nabil, Regional Partner and Head of Project and Development Services for MENA, said the operating environment for developers and contractors has become considerably more demanding, and that the regional conflict is being felt at project level through material costs, procurement and delivery programmes.
• Supply risk: Knight Frank said disruption to regional shipping and supply chains, with higher logistics and input costs, is creating risk around procurement, timelines and delivery costs. Projects relying on imported materials and equipment are the most exposed. No affected schemes were named.

Background

The pipeline sits under Vision 2030, Saudi Arabia's programme to diversify the economy away from oil. Knight Frank frames the $2.07 trillion figure as a measure of long-term ambition rather than committed spending, since schemes span everything from early planning to active construction.

Between the lines

The two Knight Frank partners frame the same pipeline differently: Durrani points to scale and possible rephasing, Nabil to day-to-day delivery strain. Read with the 24% steel increase and 46% of contracts concentrated in Riyadh, the risk looks less about whether projects proceed than about which ones get sequenced first — and the review names none.

What's next

Watch whether construction output tracks the forecast $190.4 billion for 2026, and whether contract awards outside Riyadh, Makkah and the Eastern Province pick up. Further moves in steel and aluminium prices would test the rephasing warning.

Source: TradeArabia, Knight Frank, Zawya