Saudi Arabia’s construction activity expanded for a fifth consecutive month in September, although the pace of growth eased from August, according to the latest alrajhi capital Saudi Construction Index.

The seasonally adjusted index fell to 54.4 in September from 55.4 in August, but remained above the 50 threshold separating growth from contraction. It was the slowest pace of expansion in four months.

The alrajhi capital Saudi Construction Index is based on a monthly survey of 200 construction companies and tracks changes in activity across residential, non-residential structures and infrastructure. 

The Saudi financial group said activity increased across all three sectors tracked by the index - residential, non-residential structures and infrastructure - with residential and infrastructure recording the strongest performance.

Infrastructure activity accelerated in September, with its index rising to 55.8 from 53.9 in August, its second-highest reading since the survey began in January. The residential index stood at 56.6, it stated.

Survey respondents cited resilient market conditions and demand linked to large construction projects as key drivers of activity across residential, commercial and infrastructure work.

Some companies, however, reported slower decision-making by clients and rising cost pressures, which weighed on activity.

Input price inflation rose to its highest level since January, while suppliers' delivery times lengthened slightly. Subcontractor availability continued to improve, the survey showed.

New orders continued to increase and construction companies remained positive about their project pipelines. About 34% of firms expect activity to rise over the next three months, compared with 8% that anticipate a decline, it added.