Thursday 16 / May / 2024
Muscat: Defying regional and global geopolitical challenges, GCC project awards increased by 20.3 percent year-on-year during the first quarter (Q1) of 2024 to reach $45 billion as compared to $37.4 billion during Q1-2023, according to a new report.
“The trend also defies oil production cutbacks which have all weighed on economic growth in the region as seen from IMF’s latest forecast that slashed GCC economic growth forecast for 2024 to 2.4 percent from its previous forecast of 3.7 percent,” the Kuwait-based Kamco Invest said in its latest report.
The consistent elevated trend in Gulf Cooperation Council (GCC) contract awards underlines the entrenched resolve of GCC governments to see through their diversification projects, as well as state funding support, Kamco Invest said in its GCC Projects Market Update April-2024.
Growth in GCC contract awards was evenly distributed during Q1-2024 as three out of the six countries in the GCC recorded year-on-year (y-o-y) growth in their project’s awards, including two of the largest projects markets in the region, Saudi Arabia and Qatar, while the remaining three countries witnessed declines. Saudi Arabia alone comprised more than half of the contracts awarded in the GCC region during Q1-2024 with aggregate awards of $23.5 billion in Q1-2024 against $19.1 billion in Q1-2023 shrugging off underwhelming gross domestic product (GDP) growth projections by the IMF and continuing its strong non-oil growth rate run.
Comparatively, total contracts awarded in the UAE witnessed a marginal dip of 1 percent y-o-y to reach $11.5 billion during Q1-2024 as compared to $11.6 billion in Q1-2023. On the other hand, aggregate value of contracts for Qatar jumped 68.5 percent y-o-y during Q1-2024 to reach $6.1 billion against $3.6 billion in Q1-2023.
The Kamco Invest report further said that, “In terms of sectors, Q1-2024 witnessed a jump in the value of projects awarded in the Gas and Oil sectors. Total GCC Gas Sector contracts awarded during the quarter jumped more than 19 times to reach $7.4 billion as compared to $382 million during Q1-2023.”
On the other hand, the total value of contracts awarded in the GCC Oil Sector increased nearly seven times to reach $9 billion during the similar period, making the sector the biggest contributor in terms of absolute growth in value of contracts awarded in the GCC region during the quarter.
GCC projects market outlook
According to MEED Projects, the GCC project market index for upcoming contracts as of April-2024 reached $1.4 Trillion. Saudi Arabia comprised the lion's share of upcoming GCC projects (50.2 percent or $709 billion) followed by the UAE which has $316.1 billion and Oman with estimated upcoming projects at $172.1 billion. In terms of sector representation, the Construction Sector comprised the largest sector, 33.5 percent or $462.4 billion, of upcoming projects in the GCC followed by the Transport Sector which comprised 20.5 percent or $283 billion of upcoming projects in the region. Comparatively, the total value of GCC project market index for ongoing projects as of April-2024 stood at $1.3 trillion of which Saudi Arabia comprised 54.4 percent ($683.3 billion) followed by the UAE and Kuwait each representing 30.9 percent and 5.9 percent respectively.
According to MEED Projects, the total value of ongoing projects currently in Kuwait reached $49.2 billion as of April-2024 of which 65 percent were in the Construction Sector, 13.9 percent in the Transport Sector and 13.1 percent in the Power Sector. In terms of sectoral representation, 68.6 percent or $479.4 billion of the currently ongoing GCC projects were classified as Construction Sector contracts followed by the Transport Sector which received 11.8 percent or $82.7 billion of the current and ongoing projects in the GCC.
