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GCC project contracts value down 22pc in 2018

Infra News - Published on Thu, 14 Feb 2019

Image Source: Gulf Construction
Trade Arabia reported that the value of projects awarded in the GCC region last year fell by 22 per cent to a new low of just USD 97 billion. According to the latest data from Meed Projects, despite rising budget expenditure and higher oil prices, the value of contracts awarded in 2018 in the region declined by USD 27 billion year-on-year, marking the lowest annual total recorded since 2004.

It stated that every GCC state posted a lower value of awarded contracts compared with 2017.

The UAE, the region’s largest projects market, saw the value of work awarded fall by just under USD 5 billion to USD 44.5 billion.

It was the first time in four years that the UAE registered a decline in project activity, which was caused primarily by a sharp fall in contract awards in Dubai from USD 31 billion in 2017 to USD 24.6 billion last year on the back of softening real estate prices.

Saudi Arabia fell by 10 per cent on the previous year to USD 26.4 billion worth of awarded contracts, while Kuwait and Oman both decreased by more than 50 per cent to just USD 5.6 billion and USD 5.1 billion respectively.

Every sector, except water, also fell year-on-year as the decline in project spending was spread evenly across different industries.

Construction, the largest single sector, declined to USD 45.8 billion last year, more than 40 per cent lower than its peak of USD 76.6 billion in 2014, according to Meed Projects, which currently tracks more than 15,000 active projects in the region.

Mr Ed James, Director of Content & Analysis at Meed Projects said that “It is clear that the much hoped for improvement in the projects market’s fortunes did not materialise in 2018. This was despite higher oil prices and government commitments to raise projects spending.”

Experts pointed out that there were a number of reasons for the market's failure to benefit from the improved regional macroeconomic environment.

Source :

Posted By : Rabi Wangkhem on Thu, 14 Feb 2019
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