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Project awards in the GCC defied regional and global challenges, surging 20.3 per cent year-on-year to reach $45 billion in the first quarter of 2024.
This comes despite a recent International Monetary Fund (IMF) forecast slashing GCC economic growth to 2.4pc due to geopolitical tensions and oil production cutbacks.
Analysts from Kuwait-based Kamco Invest believe the sustained rise in project awards reflects the unwavering commitment of GCC governments to diversification plans and continued state funding. The growth was spread unevenly, with three out of six GCC countries experiencing year-on-year increases, including economic giant Saudi Arabia.
Saudi Arabia, shrugging off the IMF’s downbeat projections, remained the dominant player, awarding over half ($23.5bn) of the region’s contracts in Q1-2024, compared to $19.1bn the previous year. This highlights the country’s continued focus on non-oil growth.
The UAE saw a slight dip (1pc) in awarded contracts ($11.5bn), while Qatar witnessed a significant jump (68.5pc) to $6.1bn.
The oil and gas sectors experienced a notable boost, with gas project awards skyrocketing over 1,900pc to $7.4bn compared to Q1-2023. Oil contracts also saw a near sevenfold increase, reaching $9bn, making it the sector with the highest absolute growth.
Looking ahead, the GCC project market index for upcoming contracts sits at a staggering $1.4 trillion, with Saudi Arabia leading the pack at $709bn. Construction remains the dominant sector (33.5pc or $462.4bn) for upcoming projects, followed by transport (20.5pc or $283bn).
The ongoing project market also boasts a significant value of $1.3trn, with Saudi Arabia again holding the majority share (54.4pc or $683.3bn). Construction continues its reign here as well (68.6pc or $479.4bn), followed by transport (11.8pc or $82.7bn).
This surge in project awards signifies the GCC’s determination to push forward with diversification plans despite economic challenges. The focus on non-oil sectors like construction and transport paints a picture of a region actively seeking long-term economic stability.
avinash@gdnmedia.bh
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