The value of major projects awarded in the GCC has fallen 10 percent in the first half of 2012 compared to the year-earlier period due to a slowdown in Saudi Arabia, new data showed on Sunday.
A report said that the GCC projects market has struggled so far in 2012 after a pick-up in activity in Qatar and the UAE was not enough to offset a slowdown in Saudi Arabia, the region’s largest projects market. Just $55bn worth of projects were awarded in the GCC in the first half of the year, 10 percent lower than the equivalent period in 2011, and the worst performance overall since 2005.
The comparatively weak performance means that the market will struggle to match the $130bn worth of contracts awarded in 2011, which itself was also the lowest annual total since 2005, the MENA Projects Forecast & Review 2012 by MEED Insight said.
“We are seeing quite a drastic slowdown in contract activity in Saudi Arabia as the government – by far the largest client in the market – struggles to process the hundreds of major projects it has planned,” said Ed James, head of MEED Insight.
“Because the kingdom’s projects market is as large as all the other GCC markets combined, any reduction in activity has a major impact on the overall health of the market.”
In the UAE and Qatar, the projects market performed better in the first half of the year compared with the same period in 2011 as the latter started accelerating its 2022 FIFA World Cup infrastructure spending and the former saw a return to life in the Dubai market.
“The UAE and Qatar markets have seen small pick-up in activity in the first half of the year, which is encouraging,” said James. “However, the advances have not been enough to offset the fall in Saudi Arabia.”
source: Arabian Business
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