Saturday, 23 August 2025
The total value of contracts awarded across the Gulf Cooperation Council (GCC) countries declined in the first quarter of 2025, falling by 26.8% year-on-year to USD 52.4 billion. This marks the lowest figure recorded over the past two years and is primarily attributed to a sharp decline in contract activity in Saudi Arabia. In contrast, the United Arab Emirates recorded a modest increase in awarded contracts, helping to partially offset the regional downturn.
Saudi Arabia experienced the largest decline in contract awards, with a 49.9% decrease compared to Q1 2024. The country’s contract value dropped to USD 17 billion from USD 33.9 billion in the previous year, reducing its share of total GCC project awards to 32.4%, down from 47.4%. The contraction was primarily felt in the Construction and Gas sectors. Despite the downturn, Saudi Arabia remains focused on long-term infrastructure and energy transition plans. Major contracts awarded during the quarter included Siemens Energy’s USD 1.6 billion agreement for power plant upgrades and a USD 301 million contract for the second phase of the Avenues Riyadh development.
The UAE was one of only two GCC countries to post year-on-year growth in awarded contracts, increasing by 11.7% to USD 26.1 billion. This expansion elevated the UAE to the largest project market in the GCC for the quarter, surpassing Saudi Arabia. Growth was supported by strong performance in the Power sector and continued momentum in Abu Dhabi’s infrastructure investments and ADNOC Gas’ expansion plans.
Kuwait posted the highest percentage increase in contract awards among the GCC countries. The value of awarded contracts rose by nearly 200% to USD 1.4 billion. The increase was largely driven by activity in the Transport and Power sectors, in line with Kuwait’s Vision 2035. Projects such as the South Saad Al-Abdullah City infrastructure development and the anticipated Dorra Field Development are expected to maintain this positive trajectory.
Qatar, however, experienced a 37.9% decline in awarded contracts, totaling USD 5.2 billion in Q1 2025. The drop was largely due to lower activity in the Transport, Water, and Construction sectors. Nonetheless, the Gas sector in Qatar saw a notable surge, with contract awards rising significantly on the back of major developments in the North Field Production Sustainability project.
Across the GCC, the Construction and Oil sectors were among the hardest hit, with year-on-year declines of 50.4% and 54.6%, respectively. Despite these drops, Saudi Aramco signaled its intention to maintain capital expenditure, particularly in petrochemical projects.
Looking ahead, the GCC projects market is expected to remain active in 2025. Around USD 235 billion worth of contracts are currently under tender or evaluation, with Saudi Arabia accounting for the majority of this pipeline. There is also a strong outlook for healthcare, hospitality, and transport projects. Approximately USD 1.54 trillion in contracts are in pre-execution phases, with Saudi Arabia leading with more than half of that value. While the risk of a slowdown exists due to fluctuating oil prices and global economic uncertainty, the GCC’s overall project market remains resilient, supported by ongoing diversification efforts and long-term infrastructure plans.
