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Contracts for GCC projects contracted in the third quarter of this year, with their total value falling 40.8 percent to $11.1 billion from $18.8 billion last year, data from regional non-banking financial giant Kamco Invest showed. Largest AUM in the region.
The decline was exacerbated by high inflation and ongoing supply chain issues, largely due to intermittent Covid-19 restrictions in China and USEU sanctions on Russia. In addition, the Kuwait Group said in its review that raising benchmark interest rates by global and regional central banks to combat runaway inflation also affected project funding.
It added that with the exception of Qatar, which saw a smaller decline, all GCC countries saw double-digit declines in the total value of award-winning projects.
Kamco Invest noted that the UAE overtook Saudi Arabia as the largest project market in the GCC during the quarter, with contracts worth $3.7 billion compared to Saudi Arabia’s $3.5 billion. Qatar ranked third in the quarter with a total contract value of $3.4 billion.
It added that Saudi Arabia, the UAE and Qatar together accounted for 96% of the total value of contracts awarded by the GCC during the quarter.
The total number of projects awarded in Kuwait in the third quarter also decreased by 69.1% to $162 million from $525 million in the third quarter of 2021. Oman witnessed a 68.1% year-over-year decline in new project awards to $154 million in the third quarter of 2022. The total value of contracts awarded in Bahrain in the third quarter of 2022 reached US$125 million, compared to US$659 million last year.
According to Kamco Invest, only the chemical industry saw an increase in the value of projects awarded in the third quarter, with new contract awards up $540 million year-over-year, bringing the total to
$1.1 billion in the third quarter of 2022.
The total value of contracts awarded by the GCC in September 2022 fell 26.2% to $53 billion from $71.7 billion in the nine-month period of 2021. Saudi Arabia accounted for more than half of the total number of projects awarded by the GCC for the first time in a year and nine months.
The total value of contracts awarded by the Kingdom during 9M-2022 increased by 14.9% to $30.3 billion from $26.3 billion last year.
The lifting of Covid-19-related restrictions and rising oil prices contributed to the uptick in the Saudi project market in 2022.
By comparison, the total value of contracts awarded in the UAE in the first nine months
It fell 5.8 percent to $12.4 billion for the year, compared with $13.1 billion last year.-TradeArabia News Service
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