The Public Investment Fund (PIF) launched the Gulf Coast Development Company in September to develop an integrated residential and tourism destination on the Al-Khafji coast in Saudi Arabia’s Eastern Province. The company will develop the project in partnership with private sector, local and regional investors with the aim of expanding accommodation and tourism options in the northern part of the province.

The development covers around 20 square kilometres (sq km) and features a 10-km waterfront along the Arabian Gulf. Its location near the Saudi-Kuwaiti border provides access to visitors and residents from the kingdom, Kuwait, and other Gulf Arab states. The project is also expected to create direct and indirect economic opportunities for the local community.

The destination will include eight residential neighbourhoods with more than 16,000 housing units, about 1,400 hotel keys, public and commercial facilities, tourism and educational amenities, as well as dedicated boat marinas. Development will take place in three phases, with the first phase scheduled for completion in 2030 and comprising three neighbourhoods.

Beyond the major projects, the country’s construction pipeline remains strong. In regions like Madinah, for example, growth this year is driven by development projects and an increase in the number of commercial registrations from 13,757 in December 2025 to 14,018 in March 2026.

Meanwhile, the National Center for Waste Management (MWAN) launched 27 investment opportunities in August to develop and operate 33 facilities across several regions. The projects, undertaken in partnership with five municipalities, have a combined value of more than ⃁ 2 billion.

GROWTH RUN EXTENDED

Saudi Arabia's construction sector expanded for a fourth consecutive month in August, supported by steady demand and a continued rebound in new orders, according to a newly released industry survey.

The seasonally adjusted Saudi Construction Index, produced by S&P Global Market Intelligence, edged up to 55.4 in August from 55.2 the previous month. The reading stayed well clear of the 50-point line that separates growth from contraction and represented the second-strongest result since the survey's launch in January.

All three major construction segments – infrastructure, residential and non-residential – saw an increase in activity, with infrastructure new orders rising at their fastest pace since February. The broader operating environment remained favourable, pointing to the fastest growth in purchasing volumes since the survey began and a fourth straight month of improving supplier delivery times.

Residential construction was again the standout performer, posting an index score of 57.5 points – the third time in four months it has led growth. Companies linked the improvement to better market conditions, the launch of new projects, and continued work on large urban development schemes.

Infrastructure activity also grew solidly, registering 53.9. While the pace eased from July, it still outpaced every reading recorded in the first half of 2026. Growth in this segment was attributed to regional development programmes, utilities investment, and new road and transport connectivity projects.

ORDERS AND HIRING SOAR

New business intake across Saudi construction firms rose sharply again in August. Infrastructure led the way, recording its fastest growth in new work since February, closely followed by residential, where new orders grew at the strongest rate since the survey began.

The stronger order books translated into higher employment levels for the month, while firms also stepped up purchasing at the fastest rate since January. Supplier delivery times kept improving for a fourth straight month, even though demand for construction materials increased and some companies continued to report delays tied to international shipping.

Input costs, meanwhile, accelerated after cooling to a three-month low in July, driven by rising transport expenses and higher prices for aluminium, copper and steel.

Construction and related businesses stayed broadly optimistic about the year ahead: 42% expect activity to improve over the next 12 months, against just 7% anticipating a decline, though overall confidence eased slightly compared with July. Sentiment over a shorter three-month horizon was also positive, strongest in the residential and infrastructure segments, where firms cited higher sales pipelines and a pickup in new project launches.

Despite the faster rise in input costs, companies remain confident in the outlook, citing healthy project pipelines and expectations that activity growth will continue, according to the survey.