The value of construction contract awards in the GCC grew by 27 per cent on the first quarter as the UAE and Kuwait both recorded a sharp increase in construction activity.
There was $15.7bn-worth of construction and infrastructure contracts awarded in the second quarter, compared with the $11.2bn awarded for the previous quarter. The value of contract awards for the second quarter is an increase of 37 per cent on the same period in 2011.
The main contributor to the market growth was an increase in the value of contracts awarded in the UAE, which recorded the conclusion of $6.2bn of construction and infrastructure deals, a 48 per cent increase in contract awards on the first quarter. The biggest contract award was the $2.8bn deal awarded to a consortium led by Turkey’s TAV.
Kuwait and Qatar also both recorded significant increases in contract awards from the first quarter. In Kuwait, $2.1bn of construction contracts were awarded during the second quarter, a 63 per cent increase on the $767m of deals awarded during the first quarter. The largest contract award was the $616m deal to build a new cancer centre for the Health Ministry.
In Qatar, the value of construction and infrastructure awards increased by more than 23 per cent as $3.4bn-worth of construction contracts were awarded in second quarter, from $2.6bn in the first three months of the year. The biggest contract award was the $961m deal awarded to South Korea’s Hyundai Engineering & Construction to build the Lusail Expressway in Doha.
Bahrain, the GCC’s smallest market, recorded a 35 per cent increase in construction contract awards with $850m-worth of deals, compared with the $550m awarded in the first quarter.
Oman’s construction market remained flat, with about $700m-worth of construction awards in each of the first two quarters of 2012.
Interestingly, Saudi Arabia, the region’s biggest construction market, recorded a 40 per cent drop in contract awards during the second quarter. Approximately $2.5bn-worth of contract awards were made in the second quarter, compared with the $4.2bn awarded in the first three months. Despite a lot of major projects coming out for tender in the kingdom in the past 12 months, there has been much fewer contract awards. The total construction and infrastructure awards in Saudi Arabia for the first half of 2012 is down 56 per cent on the same period in 2011.
Despite the overall second-quarter growth, the GCC market is still down year-on-year with the $27.2bn-worth of contract awards for the first half of 2012 almost 16 per cent lower than the $32.5bn awarded for the first six months of 2011.