GCC project awards declined during the third quarter of the year as global economic challenges mounted, with the region’s total contracts value falling by 40.8 per cent to $11.1 billion from last year’s figures of $18.8 billion, according to Kamco Invest, a regional non-banking financial powerhouse.

This decline was intensified by high inflation and continuing supply chain problems mainly due to China’s intermittent Covid-19 restrictions as well as the sanctions on Russia. In addition, the increase in benchmark rates by global and regional central banks to combat runaway inflation also affected project funding, stated the Kuwaiti group in its review.

All the GCC countries, barring Qatar that saw a smaller decline, witnessed a double-digit fall in their aggregate Q3-2022 y-o-y value of projects awarded, it added.

Kamco Invest pointed out that the UAE overtook Saudi Arabia as the largest projects market in the GCC in terms of contracts awarded during this quarter, recording a total of $3.7 billion contracts against Saudi Arabia’s $3.5 billion. Qatar ranked third during the quarter with total contract awards at $3.4 billion.

Saudi Arabia, UAE and Qatar accounted for a combined 96 per cent of the total value of contracts awarded in the GCC during the quarter, it added.

Total projects awarded in Kuwait during Q3 too declined by 69.1 per cent to $162 million from $525 million for Q3-2021. Oman witnessed Q3 new projects awards drop by 68.1 per cent y-o-y to $154 million. Aggregate value of contracts awarded in Bahrain reached $125 million in Q3-2022 when compared to $659 million last year.

The total value of contracts awarded in the GCC during 9M-2022 declined by 26.2 per cent to $53 billion, down from $71.7 billion in the nine-month period for 2021. Saudi Arabia accounted for more than half of total projects awarded in the GCC for the first nine months of the year.  The kingdom’s total value of contracts awarded during 9M-2022 increased by 14.9 per cent to reach $30.3 billion up from $26.3 billion last year.

The removal of Covid-19 restriction and higher oil prices have contributed to the rise in Saudi Arabia’s projects market during 2022. Comparatively, the UAE’s aggregate contract awards during 9M-2022 dipped 5.8 per cent to $12.4 billion against $13.1 billion last year.