Saudi Arabia topped the GCC project awards, which improved during the year's second quarter despite global economic challenges caused by supply chain problems and higher oil prices primarily driven by the Russia-Ukraine conflict.
Higher crude oil price was the most significant contributor to inflation numbers across countries, including in the US, where it contributed around 200 bps to the 9.1 percent inflation during June-2022.
A recent report on the GCC project market update by Kuwait-based KAMCO showed that the total value of GCC contracts awarded increased by 11.7 percent year-on-year during Q2 in 2022 to reach $22.8 billion, compared to $20.4 billion in Q2 of 2021.
Saudi Arabia and Oman reported higher contract awards during the quarter that offset a dip in awards in Kuwait, Bahrain, Qatar, and the UAE.
Saudi Arabia, the GCC's largest projects market, recorded the biggest y-o-y increase in the value of contracts awarded during Q2-2022, which reached $16.5 billion in 2022 as compared to $9.3 billion in Q2-2021.
The contracts awarded as part of the $500 billion Neom project boosted the Kingdom's project awards during the quarter.
According to MEED, three out of the ten most significant contracts awarded in the Kingdom during Q2-2022 were from the Neom project. Comparatively, the UAE recorded a 46.4 percent fall in y-o-y projects awarded in Q2-2022, which reached $3.1 billion.
Saudi Arabia represented 77.2 percent of GCC contract awards in Q2-2022. Total projects awarded in Kuwait during Q2-2022 declined by 67.9 percent to $521 million, down from $1.6 billion for Q2-2021.
Total projects awarded in Kuwait reached $521 million in Q2-2022, witnessing a 67.9 percent decrease from $1.6 billion in Q2-2021.
Kuwait's transportation sector recorded the most significant increase during the quarter, with projects worth $377 million, up from $18 million in Q2-2021.
Regarding sector classification, the transportation sector witnessed the biggest increase in absolute value during the quarter, with an increase of $4.8 billion in new contracts to reach a total of $7.7 billion during Q2-2022.
Similarly, the value of new contracts in the GCC Oil Sector increased almost threefold to reach $4.5 billion during Q2-2022 rising from $1.6 billion during Q2-2021.
On the other hand, the gas, construction, and power sectors witnessed y-o-y decline in awards. Project awards in the construction sector contracted 36 percent y-o-y to $4.3 billion during the quarter.
Despite varying trends during Q2-2022, the projects pipeline in the GCC region continues to remain strong.
Data from MEED Project showed around $2.65 trillion worth of projects planned or underway in the GCC as of the end of June-2022 compared to $2.59 trillion at the end of March-2022.
