GCC Contract Awards Slump During Q3-2025

The total value of contracts awarded across the GCC declined after four of the six member countries – the UAE, Saudi Arabia, Bahrain and Oman – recorded y-o-y decreases in project awards during Q3-2025 as geopolitical conflict in the Middle East continue to persist and weigh on risk appetite, Kuwait-based Kamco Research said in its latest report.

The aggregate value of awards in the region fell by 27% y-o-y in Q3-2025 to $54.8 Billin, the second-lowest figure in the last ten quarters as compared to $75.0 billion in Q3-2024.

This downturn was primarily driven by a sharp contraction in project awards in Saudi Arabia, together with a similarly weak performance in the UAE, both of which experienced significant y-o-y declines in awards during the period, the report said.

Likewise, in terms of first nine months performance, overall GCC contract awards during the first nine months of this year declined by 30.5% y-o-y to $154.4 billion as against $222.2 billion for the corresponding period in 2024, largely reflecting the substantial reduction in project activity in Saudi Arabia over the period.

Every market, with the exception of Qatar and Kuwait, recorded a y-o-y decline in awards during Q3-2025.  Conversely, through these nine months in 2025, all the GCC countries except Kuwait and Qatar, registered y-o-y decreases in awarded contracts.

This sharp pullback in project activity follows two years of record spending, during which the region invested heavily in large-scale oil and gas developments alongside a $1 trillion-plus GIGA projects program in Saudi Arabia.

The GCC-wide decline during the first nine months of 2025 was mainly led by Saudi Arabia, as the Kingdom’s giga projects awards declined during the year. Several factors have underpinned the slowdown in this area.

Citing MEED Projects, the report said that lower-than-expected foreign investment into the giga projects, sluggish oil prices, as well as massive cost inflation and engineering challenges in some giga schemes, notably NEOM, collectively contributed to the overall contraction of giga projects awards in Saudi Arabia.

Sectoral Perspective

From a sectoral perspective, six of the eight key GCC industries registered y-o-y declines in contract awards during Q3-2025.

The GCC construction sector recorded a 62.4% drop, with awards falling to $11.1 billion in Q3-2025, from $29.6 billion in Q3-2024. This was followed by the power sector, which saw a 13.3% y-o-y decline to $17.1 billion, down from $20 billion in Q3-2024.

Consequently, construction and power were the primary contributors to the overall decline in GCC project awards during the quarter, the report said.

On the other hand, the gas and oil sectors were the only industries to record a y-o-y increase in contract awards during Q3-2025, while the remaining six sectors experienced declines across Qatar, Bahrain, and Saudi Arabia.

Given the sharpness and breadth of the deceleration, there are growing concerns that full-year contract awards in 2025 may fall short of the total value recorded in 2024, Kamco Research added.