- First half Saudi Arabia contract awards double
- UAE market slowdown caused by real estate oversupply
- Qatar remains focused on World Cup related projects
Construction contract awards across the region have halved in all six GCC states except Saudi Arabia where the value of awarded contracts in the first half of this year has doubled compared with the same period in 2014. The GCCs total value of contract awards in the first half of this year is $32bn compared to $44bn in the same period last year.
First half contract awards across the GCC are at the lowest rate since 2012 when the value of construction awards totalled $27.3bn. UAE construction contracts have dropped by 50 per cent as private and public investors hold back amid low oil prices and economic volatility for hydrocarbon dependent economies.
Saudi Arabia pressing ahead
According to data from regional projects tracker MEED Projects, Saudi Arabias construction market saw almost $14bn worth of contract awards so far this year, nearly double the $7.7bn that were awarded in the same period last year.
Notable contracts have been the $1.75bn contract from the Umm al-Qura for Development & Construction Company for infrastructure work on the King Abdul Aziz Road (KAAR) in Mecca and a number of large housing contracts awarded by oil major Saudi Aramco. Aramco has awarded up to $1bn worth of contracts in the last three months as it is set to press ahead with a number of housing developments in the eastern province.
UAE real estate brings total down
The 50 per cent decline in awarded contracts in the UAE this year is due to the fall in oil prices and an oversupplied real estate market dampening confidence. Both Dubai and Abu Dhabi have an oversupply of real estate after the delivery of large and previously delayed real estate schemes over the past three years.
If 2015 is to improve, construction contracts for projects such as the Atlantis hotel expansion in Dubai and the Maryah Central retail centre in Abu Dhabi will need to be awarded..
Qatars construction market is skewed by its preparations for the World Cup as it puts on hold projects that arent directly related to the tournament. So far the primary focus has been on sports facilities including World Cup stadiums and residential, hotel and hospitality schemes such as the $200m contract awarded to Indias Shapoorji Pallonji for the development of the Pearl Qatar, a major residential project in the West Bay area of Qatar.