NBK reveals project awards in Q1 2023 in Kuwait reached $1.71bn
The acceleration was mainly due to projects in the power and water sectors, a report by NBK revealed
The first three months of 2023 saw the value of awarded construction projects in Kuwait jump to US $1.71bn. According to the National Bank of Kuwait (NBK), the figure represents growth of 332% over 2022, and is mainly driven by activity in the power and water sectors, which rose to its highest level in almost six years.
NBK added that the value of awarded projects rose 78.3% quarter-on-quarter; three months into 2023, the figure is already equivalent to more than 70% of the total value of projects awarded last year, the financial institution explained.
The acceleration was said to be mainly due to projects in the power and water sectors, awarded by the Ministry of Electricity & Water (MEW). As per NBK, activity in the power sector was particularly strong, rising to its highest level in almost six years, with $490mn worth of MEW projects, and $196mn of GCC Interconnection Authority (GCCIA) projects awarded. These totalled $770mn and accounted for 45% of total project awards in Q1, it stated.
The Kuwaiti bank also said that the transport sector turned in a solid performance. Total project awards came in at $414mn, the bulk of which relate to road and infrastructure works on Sabah Al-Ahmad City by the Public Authority for Housing ($359mn).
In late March 2023, Egis said it would provide PMC services for the Al Mutlaa City Development in Kuwait and, in early April 2023, Kuwait Arab Contractors won a $367mn contract for infrastructure services.
NBK pointed out that activity in the construction sector was firm, though it softened from the previous quarter. Total construction awards declined 33% quarter-on-quarter to $339mn, it revealed.
Sharing its outlook for the remainder of 2023, NBK stated the positive momentum could continue. The partial recovery in the expatriate workforce in 2022 could indicate project mobilisation, and the government could prioritise acceleration in its development plan execution in the coming months, once parliamentary elections are completed, it stated.
For the time being, the domestic environment remains challenging with a projected decline in government capital spending outlined in the FY23/24 draft budget, a slowdown in the consumer-spending boom, relatively high costs of labour and construction materials, it concluded.
In mid April 2023, a report from KPMG said infrastructure is a vital component in Kuwait’s Vision 2035 agenda.
