GCC Project Activity Slows Sharply in Q3 2025 Amid Regional Downturn

The Gulf Cooperation Council’s (GCC) project market weakened significantly in the third quarter of 2025, with total contract activity falling by 27% year-on-year to USD 54.8 billion, according to the GCC Projects Market Update – Q3 2025 released by Kamco Invest. The decline marks one of the weakest quarters in recent years, driven primarily by lower activity in Saudi Arabia and the United Arab Emirates.

For the first nine months of 2025, project values across the GCC totalled USD 154.4 billion, a 30.5% drop compared to USD 222.2 billion in the same period of 2024. The slowdown follows two years of record investment, particularly in Saudi Arabia’s USD 1 trillion-plus giga-project programme and large-scale oil and gas developments.

Saudi Arabia Leads the Regional Decline
Saudi Arabia, the region’s largest projects market, saw activity fall 34.8% in Q3 2025 to USD 28.1 billion. The Kingdom’s total for the first nine months nearly halved to USD 61.5 billion from USD 116.6 billion in 2024, reflecting a marked slowdown in giga-project execution. Kamco Invest attributed the decline to “lower-than-expected foreign investment, sluggish oil prices, and cost inflation” affecting major schemes such as NEOM.

Despite this, Saudi Arabia’s broader economy remains relatively stable. The IMF has revised the Kingdom’s 2025 GDP growth forecast upward to 3.5%, supported by government-led projects and an expected easing of OPEC+ production cuts.

UAE Sees Sharp Drop but Outlook Improves
The UAE recorded one of the largest quarterly contractions, with project values down 65.8% year-on-year to USD 6.7 billion. The slowdown pushed the Emirates from the region’s largest projects market in Q2 to third place in Q3. For the first nine months, activity totalled USD 59.7 billion, down 18% year-on-year.

Kamco Invest expects a recovery in late 2025 and 2026, as the IMF projects UAE GDP growth of 4.8% in 2025 and 5% in 2026, led by non-oil sectors. Notable projects during the quarter included a USD 593 million contract for the Madar Mall in Sharjah and a USD 300 million project for the Erisha Smart Manufacturing Hub in Ras Al-Khaimah.

Qatar and Kuwait Show Growth
In contrast to the regional trend, Qatar and Kuwait posted increases in project activity. Qatar’s total surged 115.9% year-on-year to USD 13.6 billion, supported by preparations for the 2030 Asian Games. Key projects included USD 4 billion in contracts for offshore oil field works at Bul Hanine, awarded to China Offshore Oil Engineering.

Kuwait’s project market grew 33.8% year-on-year to USD 4.3 billion, driven by major infrastructure and energy investments. The largest project was the USD 4 billion Al Zour North IWPP Phases 2 and 3 power and desalination plant, followed by oil sector and residential construction contracts.

Sectoral Breakdown: Construction and Power Lead the Slowdown
Six of the GCC’s eight key industries recorded declines in Q3 2025. Construction activity fell by 62.4% to USD 11.1 billion, while Power dropped 13.3% to USD 17.1 billion. In contrast, the Oil and Gas sectors were the only segments to post growth.

Pipeline Remains Strong Despite Near-Term Weakness
Looking ahead, Kamco Invest expects project momentum to pick up in the fourth quarter as Saudi Arabia and the UAE resume tendering for delayed schemes. However, full-year 2025 totals are likely to remain below 2024 levels.

The GCC’s pre-execution pipeline remains substantial at approximately USD 1.78 trillion, with Saudi Arabia accounting for USD 887 billion—nearly half of the total—and the UAE contributing USD 434 billion. The Construction sector represents the largest share of upcoming projects (USD 624 billion), followed by Transport (USD 300 billion) and Power (USD 294 billion).

Kamco Invest noted that Saudi Aramco alone plans to launch 99 projects over the next three years, including major expansions in oil, gas, and treatment facilities. Across the region, 29 independent power projects are currently at bidding or evaluation stages, led by Saudi Arabia and the UAE.

While 2025 has marked a pause in the region’s two-year investment surge, Kamco Invest analysts expect medium-term momentum to remain positive, underpinned by large public-sector initiatives, infrastructure demand, and energy diversification strategies.

Source: Kamco Invest, “GCC Projects Market Update – Q3 2025” (October 2025).