GCC project contracts value plunges 40.8% in Q3, says report

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GCC project awards contracted during the third quarter of the year as global economic challenges mounted with its total value falling by 40.8% to $11.1 billion from last year's figures of $18.8 billion, according to Kamco Invest, a regional non-banking financial powerhouse with one of the largest AUMs in the region.

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 USEU 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 during this quarter, recording a total of $3.7 billion contracts against Saudi Arabia's $3.5 billion. Qatar ranked 3rd during the quarter with total contract awards at $3.4 billion.

Saudi Arabia, UAE and Qatar accounted for a combined 96% 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% to $162 million from $525 million for Q3-2021. Oman witnessed Q3-2022 new projects awards drop of 68.1% 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.

According to Kamco Invest, sector-wise only the chemicals sector witnessed an increase in the value of projects awarded during Q3 recording $540 million y-o-y increase in new contract awards to reach a total of $1.1 billion during Q3-2022.

Total value of contracts awarded in the GCC during 9M-2022 declined by 26.2% 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% to reach $30.3 billion up from $26.3 billion last year.

The withdrawal of Covid-19-related restriction and higher oil prices have contributed to the rise in the kingdom’s projects market during 2022.

Comparatively, the UAE’s aggregate value of contracts awarded during the first nine months of the year dipped 5.8% to $12.4 billion against $13.1 billion last year.-TradeArabia News Service