GCC contract awards slumped by almost a third last year, driven by a sharp slowdown in Saudi Arabia as gigaproject delays and weaker power and hydrocarbons spending weighed on the market
Total contract awards in the GCC fell by almost a third last year compared to 2024, as spending in Saudi Arabia collapsed due to challenges with the gigaprojects programme.
Signed projects totalled $213.2bn, just over $100bn less than the record $313.9bn figure in the previous year, according to initial full-year data from the MEED Projects database.
Almost all of this decline was due to a sharp fall in contract awards in Saudi Arabia, with total deals collapsing by nearly half from a record $164bn in 2024 to $84.5bn in 2025.
While some of this can be attributed to the widely discussed delays in the kingdom’s gigaprojects programme, decreases in expenditure in the power, oil and gas sectors also contributed to the decline.
The UAE has recorded a year-on-year fall in total awards, albeit a much smaller drop of 15% to $87.7bn. The market in the federation continues to be supported by a buoyant Dubai real estate sector, as well as hydrocarbons spending in Abu Dhabi.
In the other GCC states, both Qatar and Kuwait posted small increases in overall project expenditure, rising by 4% and 16% to $10.2bn and $23bn respectively, primarily on the back of increased oil and gas contract awards.
While there has been a steep fall in new contracts over the past 12 months, the value of work is still the third-highest annual total recorded in the region, and far higher than the $114bn average for the period 2016-22.
On a sector basis, almost every market segment registered year-on-year declines, with construction – the largest single sector – falling by $31bn, the most in absolute terms.
However, on a relative basis, the power market fell by 32% to $45.5bn and transport and infrastructure by more than 50% to $19.7bn.
It is important to note that the 2025 numbers are initial and will almost certainly grow as more contracts awarded last year are identified and added to the total figures.
With that in mind, the GCC projects market is still one of the best-performing globally despite Saudi Arabia’s recent stumbles.
This is reinforced by the fact that the value of known, planned and unawarded work continues to grow, reaching a record $3.2tn, more than half of which comprises Saudi Arabia’s projects pipeline. With the region’s largest economy and population, the kingdom still offers an impressive long-term slate of opportunities for contractors, consultants and suppliers alike.
Similarly, the short-term outlook for the coming year remains positive. MEED Projects data highlights that there are just under $400bn of individual projects at the prequalification, tender issue and bid evaluation stages, many of which would normally be expected to be awarded in the coming months.
As ever, much will depend on oil prices to maintain spending levels, but with the Dubai real estate boom showing no sign of slowing, and Saudi Arabia’s residential sector now open to foreign buyers, there is still sufficient market impetus in construction and associated infrastructure.
Likewise, a long slate of railway, metro and airport projects provides optimism in the transport segment, while the drive toward net zero, the fast-rising emergence of data centres and green hydrogen continue to result in record levels of expenditure on renewable energy production.
