Drastic fall in contract activity in Saudi Arabia as government struggles to process projects
The construction market in the Gulf region has slowed down 10% during the first six months of this year, compared with the same period last year, with only projects worth a total of $55bn awarded during the period, according to a report by MEED Insight.
“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.
The region saw $130bn worth of contracts awarded in 2011, which itself was also the lowest annual total since 2005.
“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,” said James.
The UAE and Qatar markets have seen a small pick-up in activity in the first half of the year, which is encouraging, but not enough to offset the fall in Saudi Arabia, he warned.