Gulf construction contract awards slumped to their lowest level in more than three years, the latest sign that low oil prices and a spending review in Saudi Arabia are affecting the sector.
The number of contracts awarded in the second quarter fell to $28.4 billion, the second consecutive quarterly decline, according to KAMCO Investment Co., a Kuwait-based asset manager. The fall was starkest in Saudi Arabia, where awards fell by over 70% from a year earlier, but a slowdown was also evident in the UAE.
Many contractors had based their growth plans on Saudi ramping up spending, but the slowdown is likely evidence that focus is shifting to building the infrastructure necessary for priority events like the 2034 men’s soccer World Cup. The kingdom’s projects market is among the world’s largest, worth almost $2 trillion, according to MEED Projects.
