The GCC construction market is evaluated at USD 2.4 trillion, with over 23,000 active projects at the end of the first quarter of 2020.
The latest BNC Projects Journal (Code Blue) has affirmed that the GCC construction market has changed focus to driving current projects to a conclusion in Q1 2020 and was wary in new announcements as well as contract awards. USD 48.4 billion worth of projects were completed in Q1 2020, driven by the UAE and Saudi Arabia with 38% and 27% contributions respectively.
- Oil & Gas projects worth USD 7.3 billion were awarded across the GCC in the first Quater of 2020
- USD 19.2 billion worth of urban construction projects were completed in the first quarter of 2020
- UAE construction sector leads the first Quater of 2020 with 12.4 billion worth of new project announcements, 9.4 billion worth of contract awards, and 18.4 billion worth of project completions
“As COVID-19 infects the global economy, no industry or business is truly immune. The obvious fallout in terms of delays due to the disruption to work on sites, material supply disruptions due to closed factories and shipping delays are symptoms of an economic disease that can and must be addressed,” said Avin Gidwani, CEO of Industry Networks.
Industry Networks FZC owns BNC Network which has been serving the construction industry with project intelligence since 2004. BNC’s is the largest project intelligence database in the MENA region, with 32,600+ live construction projects estimated at US$ 9.8 trillion (AED 36 trillion) spanning the urban construction, oil & gas, transportation, utilities, and industrial sectors.
New projects worth USD 21 billion were announced in Q1 2020 with the largest contribution being made by the UAE with a 59% market share followed by Qatar and Oman.
“The economic sickness concerning the construction sector is clearly infectious but unlike the coronavirus, it spreads only when businesses break connections in the flow of commerce by breaking their engagements to pay,” mentioned Avin Gidwani.
The total value of contracts awarded in Q1 2020 was USD 23.5 billion, while USD 3.1 billion worth of contracts were awarded in March. The energy sector registered USD 12.9 billion worth of project awards in Q1 driven by the UAE and Saudi Arabia with 42% and 40% contributions respectively.
The GCC Construction sector registered a 4% YoY growth in March, which was principally driven by the energy sectors with oil & gas, and the utility sector expanding by 16% and 7% YoY respectively. The manufacturing sector grew marginally by 4% YoY, while the GCC transport sector contracted by 5% YoY.
Analysis based on the BNC Projects Journal titled: Code Blue.