Gulf construction awards fall 37% to $47.4 billion in quarter

Summary

• New project awards across the Gulf fell 37.2% year-on-year to $47.4 billion last quarter.
• Every Gulf country posted double-digit declines; Oman's awards collapsed 96.6% as contract signing nearly stopped.
• Gas and chemicals grew alone, leaving $2.05 trillion of planned work facing execution doubts.

The latest

Gulf construction contract awards dropped 37.2% from a year earlier to $47.4 billion last quarter, according to Kuwaiti investment firm Kamco Invest, which recorded double-digit declines in every country in the region. Gas and chemicals were the only sectors to expand, carried by continued spending from ADNOC and Aramco. The war, Kamco Invest's data indicates, has now reached the region's building pipeline.

Details

• The headline figure: Project awards across the Gulf totalled $47.4 billion in the quarter, down 37.2% on the same period a year earlier, according to Kamco Invest. The Kuwaiti investment firm did not break out a single driver for the regional drop, but recorded that the decline was broad rather than concentrated in one market.
• The country spread: Every Gulf state registered a double-digit fall in awards. Oman was the outlier in scale, with contract awards down 96.6%, a near-total halt in new signings over the three months covered by the Kamco Invest data.
• The exception: Gas and chemicals were the only sectors to post growth during the quarter. Kamco Invest attributed that to sustained capital spending by Abu Dhabi's ADNOC and Saudi Arabia's Aramco, the two state energy producers whose programmes continued while other segments contracted.
• The pipeline: Some $2.05 trillion of planned projects remain in the regional pipeline for the rest of the year, with roughly half of that value in Saudi Arabia. The figure covers work that is planned rather than awarded, and the firm did not set a timetable for conversion into contracts.
• NEOM pulls back: Work on The Line, the linear city at the centre of Saudi Arabia's NEOM development, has been halted until after 2030. NEOM faces a bill of about $16 billion to cancel existing contracts tied to the paused construction.
• World Cup project: Saudi Arabia shelved this month a stadium it had promised for the 2034 men's World Cup. No replacement venue or revised delivery date has been announced for the shelved project.
• Why it matters: Contract awards are the earliest measurable signal of construction activity, because they precede mobilisation, procurement and payment. A 37.2% drop in awards points to a thinner workload for contractors in the quarters that follow, regardless of how large the planned pipeline looks on paper.

Background

Gulf states have anchored economic diversification plans on large construction programmes, with Saudi Arabia's giga-projects the biggest single component. The gap between announced plans and signed contracts has widened as governments reorder priorities and timelines.

Between the lines

The pattern inside the numbers matters more than the headline decline. Energy-linked spending by ADNOC and Aramco held up while everything else fell, suggesting the cuts are landing on discretionary and flagship developments rather than core hydrocarbon capacity. The NEOM pause and the shelved World Cup stadium point the same way: the $2.05 trillion pipeline is a statement of intent, not a committed spending schedule.

What's next

Watch next quarter's Kamco Invest award totals for whether Oman resumes signing, any NEOM announcement on the $16 billion cancellation cost, and Saudi Arabia's replacement plan for the shelved 2034 World Cup stadium.

Source: Kamco Invest, Reuters