The Gulf Projects Index dropped by 0.5 per cent in the week ending 26 January, due to declines in the UAE, Iraq and Iran.

Iran saw 2.8 per cent, or $5.6bn, wiped off its projects market, to reach its lowest level since 2008. Delays on the Iran-Pakistan pipeline, worth several billion dollars, were partly to blame, but sanctions continue to cast a shadow over the rest of the country’s oil and gas sector.

However, Iran’s $4bn investment in Oman boosted the sultanate’s projects market, with an iron smelter in Duqm the first scheme to be announced. Oman’s projects market expanded 1.7 per cent, the biggest gain in the region for the week. The sultanate’s market is currently at its highest level ever.

The 1.6 per cent contraction in the UAE’s projects market was driven by a slowdown in oil and gas investment, which in turn dampened the real estate sector. However, the market is still up by 14 per cent year-on-year.

Saudi Arabia, the region’s largest projects market, had a quiet week following the death of King Abdullah bin Abdulaziz al-Saud. However, investments in education, as well as gas pipeline tenders worth a total of more than $1.5bn, prevented the market from posting negative figures.

Public investments in housing and infrastructure in Qatar and Kuwait drove gains of 0.3 per cent in both countries.

Bahrain had a strong week, as 29 new real estate projects worth a total of more than $500m helped boost the market by 0.7 per cent.

Iraq recorded yet another contraction in its projects market, of 0.9 per cent. The continuing struggle with the jihadist group Islamic State in Iraq and Syria means many infrastructure schemes cannot go ahead in the country.