2 min read
Big projects in the GCC countries decreased by 19.7% due to slowing economies in Qatar and the UAE
by
Anna Fischer
Published 17 Jul 2024
In Q2 of 2024, the construction sector accounted for 47.1% of all contracts awarded, but this percentage decreased to 26.6% of the total projects awarded in the UAE.
Source: Freepik
In Q2, the Gulf Cooperation Council (GCC) saw a decrease in total project awards by 19.7% to $51.7 billion, down from $64.3 billion the year before. According to the Kamco Invest report, a top financial institution in the area, this was mainly due to fewer project awards in Qatar and fewer contract allocations in the UAE.
The distribution of contract awards across the GCC during this period was balanced, with half of the member countries registering growth in awards year-on-year while the other half saw declines.
In the UAE, the construction sector, which previously represented a substantial portion of the market, witnessed a sharp decline of 62.9%, decreasing to $4.4 billion from $11.7 billion in the previous year. This sector accounted for 47.1% of the total GCC contracts awarded in the second quarter but dropped to 26.6% in the UAE.
The distribution of contract awards across the GCC during this period was balanced, with half of the member countries registering growth in awards year-on-year while the other half saw declines.
In the UAE, the construction sector, which previously represented a substantial portion of the market, witnessed a sharp decline of 62.9%, decreasing to $4.4 billion from $11.7 billion in the previous year. This sector accounted for 47.1% of the total GCC contracts awarded in the second quarter but dropped to 26.6% in the UAE.
Oil Sector Projects in GCC
In the UAE, the gas and oil sectors experienced significant project award growth, making it the second-largest projects market in the GCC, with 31.6% of total awards.
Overall, GCC project awards decreased by 19.7% in Q2 2024, but Saudi Arabia saw a 9.9% increase. In a recent report for all GCC states, the IMF lowered real GDP growth forecasts due to regional insecurity and reduced oil production, leading to a decline in contract awards.
In Qatar, the sharp 98.5% decline in project awards to $162 million from $10.5 billion the previous year heavily impacted the overall growth of GCC contract awards in the second quarter. This drop followed a strong performance in 2023, buoyed by a $10 billion LNG project for the North Field South development.
Overall, GCC project awards decreased by 19.7% in Q2 2024, but Saudi Arabia saw a 9.9% increase. In a recent report for all GCC states, the IMF lowered real GDP growth forecasts due to regional insecurity and reduced oil production, leading to a decline in contract awards.
In Qatar, the sharp 98.5% decline in project awards to $162 million from $10.5 billion the previous year heavily impacted the overall growth of GCC contract awards in the second quarter. This drop followed a strong performance in 2023, buoyed by a $10 billion LNG project for the North Field South development.
Growth in Contract Awards Across Kuwait
In Kuwait, project awards increased by 33%, totaling $2.3 billion. This growth was seen in the gas, power, and transport sectors. Contracts in the gas sector increased by 17.3% to $14 billion, while the power and transport sectors grew by 9.7% and 27.3%, respectively, reaching $9.8 billion.
Kamco Invest also stated that the total value of planned or pipeline projects in the GCC is $3.5 trillion as of July 2. Saudi Arabia has the largest share of ongoing or upcoming projects at $1.87 trillion, followed by the UAE with $856.9 billion and Oman with $245.5 billion. Excluding ongoing contracts, upcoming GCC projects total $1.43 trillion, with Saudi Arabia leading at 51.6% ($737.2 million), followed by the UAE at 20.4% ($291.4 million) in the MENA region.
Kamco Invest also stated that the total value of planned or pipeline projects in the GCC is $3.5 trillion as of July 2. Saudi Arabia has the largest share of ongoing or upcoming projects at $1.87 trillion, followed by the UAE with $856.9 billion and Oman with $245.5 billion. Excluding ongoing contracts, upcoming GCC projects total $1.43 trillion, with Saudi Arabia leading at 51.6% ($737.2 million), followed by the UAE at 20.4% ($291.4 million) in the MENA region.
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