Click here to learn more about MEED’s GCC Construction Projects Outlook 2025 report

The construction industry in the GCC has experienced significant changes in recent years. Construction and infrastructure projects continue to represent the largest share of project expenditures in the region. However, the industry has faced various challenges and transformations.

In 2024, the total value of construction project contract awards in the GCC reached approximately $264.4bn, marking a 6% increase from $249.4bn in 2023. This growth was primarily driven by an exceptional increase in project awards in Saudi Arabia, which accounted for about $142.4bn, representing more than half of the total value.

Non-oil activities

Saudi Arabia and the UAE, the two largest economies in the GCC, have been the most successful in promoting a diversified economy. Their strategies hinge on embracing technological advancement, innovation and tourism, along with boosting their construction and real estate project markets. Increased investment in infrastructure projects has been the most important enabler in boosting the construction project market.

In the case of Saudi Arabia, its Vision 2030 has been the foremost driver, committing nearly $1tn in value to construction and real estate projects. The vision encompasses a diverse range of elements, from gigaprojects, the expansion of cities and construction of homes to upgrades to transport networks, clean energy initiatives and establishing Saudi Arabia as an international logistics hub.

Digital transformation and a focus on technology to enhance efficiency, collaboration and project outcomes are driving transformation in the UAE. Sustainable construction practices driven by environmental awareness and the UAE’s commitment to achieving net zero in 2050 are also key drivers.

Although Kuwait’s economy is in slowdown mode, induced mainly by Opec+ production cuts, a recovery has begun in the non-oil sector. Public investment, spillovers from the ongoing LNG expansion project and a strong tourism sector performance are expected to boost Qatar’s real GDP growth to almost 3% in 2025.

Oman’s economic outlook is favourable, with real GDP growth projected to rise by 3.1% in 2025.

Similarly, Bahrain’s economic growth, projected to grow at 3% in 2025, will be driven by non-oil activity. 

The market is evolving, with significant new construction clients emerging in the region, such as Saudi Arabia’s Public Investment Fund 

Despite this growth, the industry still faces intense competition for contracts, compelling contractors to submit lower tender bids to secure work, thereby eroding profit margins.

Additionally, fiscal adjustments by governments have led to delays in contract payments, causing cash flow problems for contractors and their suppliers.

The market is evolving, with significant new construction clients emerging in the region, such as Saudi Arabia’s Public Investment Fund (PIF), and novel approaches to project procurement and financing, including public-private partnerships (PPP). The outlook for the GCC construction industry remains positive, with a large pipeline of projects across various sectors, including energy, power, water and transport infrastructure.

In the GCC Construction Projects Outlook 2025 report, MEED provides a comprehensive analysis of the prospects for the construction market in the GCC. It evaluates the emerging project opportunities for contractors, consultants and suppliers across the six markets of the region. Additionally, it scrutinises the multitude of challenges and risks that construction companies in the region face.

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