The value of new awarded contracts in the GCC fell by almost 40% year-on-year in the first five months of 2025 as the market slowed on the back of the pause in Saudi gigaprojects spending and a fall in overall expenditure across the region.
In the period January-May, just $67bn of contracts were awarded across the GCC, a fall of 39% on the $110bn awarded over the same period in 2024, according to projects tracker, MEED Projects.
Every market, bar Kuwait, experienced a year-on-year decline, with Saudi Arabia seeing the biggest total fall of $34bn. Conversely, the UAE has continued to perform well, almost matching its 2024 number, which has seen it take the lead in total project spending among the six states.
On a sector basis, the largest decreases were in the construction and oil segments, although all segments, save power and petrochemicals, witnessed a decrease in year-on-year in contract values.
The sharp reduction in project awards follows two years of record spending as the region invested in large-scale oil and gas projects and the $1tn-plus giga projects programme.
However, with the completion of major contract awards on the former and the recalibration and rationalisation of the latter, the market appears to be running out steam as it struggles to deliver the $600bn-plus amount of work let over the past three years.
The situation has been compounded by the recent fall in oil prices, and uncertainty caused by the US’ imposition of global tariffs.
The slowdown in activity levels is most acute in the Saudi giga projects programme. After growing exponentially each year up to 2023 to almost $33bn, awards on the programme declined to just under $25bn in 2024 and has collapsed almost completely this year.
Just $4bn of work has been let in the first five months, which on a pro rata basis would indicate new giga project contracts could be just a quarter of the 2023 figure.
Of the main giga project clients, only Diriyah Company and Roshn Group have awarded any major contracts by value in 2025. The much-discussed programme has been hit by cost overruns and a lack of foreign investment, forcing the government to re-evaluate its spending priorities particularly in light of event-driven projects such as the Riyadh 2030 World Expo and the 2034 FIFA World Cup which must both be completed on time.
