Wednesday 08 / January / 2025
Muscat: GCC project awards surged 86 percent during the third quarter (Q3) of 2023 to reach $41.8 billion as compared to $22.2 billion in awards during Q3-2022 underlining the continued upward trend in the GCC’s projects market. This was the third-highest in terms of quarterly values of projects awarded over the last five years.
The robust growth in the total value of projects awarded in the Gulf Cooperation Council (GCC) is also a significant indicator of the determination of the GCC countries to reach their economic diversification goal. As a result of the sustained diversification projects in the GCC the general trend of the quarterly projects awarded in the region has been moving upwards since 2018.
All countries in the GCC witnessed year-on-year (y-o-y) growth in their total value of contracts awarded during Q3-2023 barring Qatar which recorded the only decline in its total value of projects awarded during the period. Kuwait led the pack in terms of y-o-y percentage growth during the quarter after the total value of contracts jumped more than 13 times to reach $2.3 billion as compared to $162 million in the corresponding quarter of 2022.
On the other hand, Bahrain remained the smallest project market in the region despite witnessing a 94.5 percent jump in its total value of contracts awarded during Q3-2023 that reached $247 million while Saudi Arabia maintained its top position as the largest projects market in the GCC during Q3-2023. The Kingdom’s project more than doubled during Q3-2023 to reach $21.2 billion against $9.3 billion. Similarly, total contracts awarded in the UAE jumped 101.7 percent to reach 15.5 billion during the quarter.
Saudi Arabia alone accounted over 50 percent of the contracts awarded in the GCC region during Q3- 2023, while Saudi Arabia, UAE and Qatar combined represented 93 percent of the overall projects awarded in the GCC.
Saudi Arabia’s growth in contract awards during the quarter was mainly driven by a jump in the value of projects awarded in the gas and water sectors. Moreover, Saudi Arabia’s y-o-y growth in contract awards was buoyed by the persistent nature in which the country’s Vision 2030 new projects are constantly being unveiled. In terms of regional sector classification, the GCC gas sector witnessed the biggest increase in terms of absolute value of projects awarded during the year recording a total $11.8 billion in Q3-2023 as compared to $811 million in Q3-2022 followed by the water sector which witnessed 178.4 percent y-o-y growth to reach $7.6 billion in total value of contracts awarded in the quarter.
According to MEED Projects, total GCC contracts that are in tender or most likely to be awarded this year are expected to surpass $110 billion in 2023 led by Saudi Arabia, Qatar and UAE project markets which have already witnessed significant growth in projects awarded for the first nine months this year.
Furthermore, Kuwait and Oman have also recorded sharper increases in value of contract awards so far during 2023. The GCC future contract awards is forecasted to be led by the oil, gas, petrochemical sectors which is poised for significant growth in the near and medium future. In terms of future spending, according to data gathered by MEED Projects, the UAE has the largest short-term value of planned projects in the oil, gas, and petrochemical sectors among the GCC countries. The UAE’s value of known future oil, gas and petrochemical projects in the next 18 months are expected to reach $28.5 billion.
Similarly, the values of known oil, gas and petrochemical contracts for Saudi Arabia and Qatar are estimated to reach $23.5 billion and $13.2 billion respectively, during the similar period. In context, the total value of contracts awarded in the past decade for the oil, gas, and petrochemical sectors reached over $280 billion.
Both the short term and the long term sentiment of the future GCC project awards is positive. Recently the Jeddah Economic Company (JEC) invited contractors to bid for the project to complete the Jeddah Tower (the world’s tallest building). The completion of the project which is expected to be achieved before 2030 would be a significant milestone for the Saudi projects market as it would underline the confidence of both the Saudi government and the construction firms.
On the other hand, the UAE is gearing up to launch new and ambitiously exciting projects as the pandemic recovery continues to pick up pace. One of the Emirate’s ambitious projects include the Tower at Creek Harbor project which is expected to start during Q2-2024.
The construction of the Tower Creek Harbor project was delayed in 2019 when the tower's foundation work was finished. Moreover, Dubai’s Roads & Transport Authority is planning to issue tender documents for the already delayed Dubai Metro Blue Line. The Blue Line would connect Dubai’s Metro network to the Dubai Creek Harbor development.
