The second quarter of 2024 saw a decrease in total project awards in the GCC due to a significant drop in project awards in Qatar and the UAE. The aggregate GCC project awards fell by 19.7 percent to $51.7 billion compared to the same period in 2023. While three countries in the GCC experienced growth in project awards, the remaining three witnessed declines. Saudi Arabia saw a 9.9 percent increase in contracts awarded during Q2-2024, driven by the acceleration of Neom projects as part of the 2030 Vision programme. The IMF has revised down real GDP growth for all GCC member states due to regional insecurity and oil production cuts, leading to a y-o-y retreat in contracts awarded during the quarter.
Total contracts awarded in the UAE declined by 23.6 percent y-o-y in Q2-2024, reaching $16.3 billion, while Qatar experienced a steep drop of 98.5 percent to $162 million. Kuwait, on the other hand, saw a 33 percent y-o-y increase in contracts awarded. The Gas, Power, and Transport sectors experienced growth in the value of projects awarded during Q2-2024. The GCC Gas Sector contracts increased by 17.3 percent, while the Power and Transport sectors recorded growth of 9.7 percent and 27.3 percent, respectively.
The total value of planned or ongoing projects in the GCC as of July 2, 2024, stood at $3.5 trillion, with Saudi Arabia accounting for 54 percent, followed by the UAE and Oman. When excluding ongoing contracts, the total value of upcoming projects in the GCC reached $1.43 trillion. Saudi Arabia dominated the Mena region’s projects in the pipeline, followed by the UAE. The Construction Sector comprised the largest sector of upcoming projects in the GCC, followed by the Transport Sector.
Future oil and gas projects are expected to play a significant role in the GCC and MENA regions’ future contract awards. Over $408 billion worth of planned and awarded oil and gas projects are in the Mena region, with Saudi Arabia leading the way. Two of the top ten upcoming oil and gas projects in the region are in the UAE, highlighting the importance of the sector in driving future project awards.
