73% month-on-month drop in new project announcements and 28% month-on-month drop in contract awards
The pace of construction activity in the GCC slowed down in August, after showing early signs of recovery in July, leading to fewer new project announcements, a report has found.
According to BNC Intelligence, there was a 73% month-on-month (MoM) drop in new project announcements worth $3.1 billion in August, while there was a 28% MoM drop in contract awards worth $3 billion.
However, the UAE led the region in new announcements and contract awards amongst its GCC neighbours, with 82% and 38% share respectively, stated BNC in the 22nd edition of its projects journal, “Corona vs. the Economy: Round 2.”
The GCC construction market is estimated at $2.4 trillion, with over 21,000 active projects at the end of August 2020, it added. The total value of project completions in just July and August achieved 77% of the total value of completions in H1 2020, it said.
“The GCC economy has been battered and bruised for two quarters but the economy isn’t knocked out. It is fighting back. Q3 marks the return of the Economy on wobbly feet and the start of Round 2 as the virus surges once again,” remarked Avin Gidwani, CEO of Industry Networks.
Led by Saudi Arabia with a 35% share, the GCC countries saw $19.6 billion worth of projects hitting construction completion, a 6% MoM increase after excluding the completion of the iconic Barakah Nuclear Power Plant Phase 1 in July as an outlier, Gidwani pointed out.
“The urban construction sector seized the spotlight in August as it contributed 96% of the total announcement, 49% of the total contract awards, and 38% of the total project completion in the GCC,”” he explained.
“The largest urban project launched in August was the $2.2-billion-worth Arada residential development in Sharjah,” he added.