The total project awards in the GCC witnessed a major decline in Q2 plunging 19.7 per cent to $51.7 billion from the last year’s figures of $64.3bn mainly due to the unprecedented slump of project awards in Qatar coupled with steep fall in UAE contract deals, according to Kamco Invest, a regional non-banking financial powerhouse.
GCC contract awards was evenly distributed during Q2 as three out of the six countries in the GCC registered year-on-year growth in their project awards while the remaining three markets witnessed y-o-y declines during the quarter.
The total project awards in the GCC witnessed a drop during Q2-2024 mainly due to the unprecedented slump of project awards in Qatar coupled with steep fall in awards in the UAE.
In terms of sectoral performance, a y-o-y decline in projects awarded in the construction sector during Q2 was one of the key factors that weighed down the overall contract awards in the UAE. The total project awards in this sector across the emirates recorded 62.9pc y-o-y decline to hit $4.4bn over last year’s figure of $11.7bn.
In context, the construction sector represented 47.1pc of the total contracts awarded in Q2 but dropped to 26.6pc of the total projects awarded in the UAE during the period.
Moreover, there were no recorded project awards in the chemical sector during Q2-2024 while there was $3.6bn project awards in Q2-2023.
However, despite the fall in the value of contracts awarded during the quarter, the UAE maintained its position as the second largest projects market in the GCC representing 31.6pc of the total contracts awarded in the region.
In the UAE gas sector, the total project awards jumped over 6.5 times y-o-y to hit $5.6bn up from $848 million last year. Similarly, contract awards in the oil sector jumped more than five times y-o-y to reach $4.3bn, up from $819m in Q2.
Aggregate GCC project awards declined by 19.7pc to $51.7bn during Q2-204 as compared to $64.3bn during Q2-2023. GCC contract awards was evenly distributed during Q2-2024 as three out of the six countries in the GCC registered y-o-y growth in their project awards while the remaining three markets witnessed y-o-y declines during the quarter.
On Saudi Arabia, the Kamco Invest report said despite continuing lower oil output, the contracts awarded by the kingdom during Q2 recorded 9.9pc increase to reach $30.6billion as compared to $27.8bn last year.
One of the main drivers of project activity growth in Saudi Arabia during the quarter is the acceleration of Neom projects as the kingdom maintains its focus on delivering the 2030 Vision program on time.
In its latest Regional Economic Outlook, the IMF has revised down real GDP growth of all the six GCC member states citing regional insecurity and continuing oil production cuts.
Total contracts awarded in the UAE declined by 23.6pc y-o-y during Q2-2024 to reach $16.3bn as compared to $21.4bn during Q2-2023.
On the other hand, aggregate projects awarded in Qatar dropped 98.5pc y-o-y for Q2 to reach $162m compared to $10.5bn last year. This steep fall of Qatari contracts awarded has dragged down the aggregate growth of GCC contracts during Q2.
On the GCC projects market outlook, Kamco Invest said the total value of projects being planned or in pipeline in the region stands at $3.5 trillion as of July 2.
Saudi Arabia comprised the lion’s share of ongoing or upcoming GCC projects (54pc or $1.87trn) followed by the UAE which has $856.9bn and Oman with estimated ongoing or upcoming projects at $245.5bn, the report said, citing MEED Projects data.
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