Saudi Arabia’s projects market saw a 34.8% y-o-y drop in contract awards in 3Q 2025, with the value of new agreements falling to USD 28.1 bn from USD 43.1 bn a year earlier, according to Kamco Invest’s latest GCC Projects Market Update (pdf). The Kingdom’s share of total GCC project awards declined to 51.3% in 3Q 2025, down from 57.4% in the same period last year.

The slowdown was largely attributed to a deceleration in gigaproject awards amid several headwinds, including weaker-than-anticipated foreign investment, soft oil prices, and substantial cost inflation and engineering difficulties — especially in projects like Neom — according to data from Meed Projects. The construction sector was also under pressure, showing a clear decline in awards for new homes and hotels.

By sector: Power led with USD 9.8 bn in new projects, despite seeing a 42.7% y-o-y decline. New construction contracts reached USD 5.2 bn, while the oil sector’s awards dipped 2.5% to USD 3.9 bn. Key agreements signed during the quarter included a USD 853 mn contract with Almabani General Contractors for two road projects in Riyadh and a USD 167 mn agreement to develop a Pirelli tyre factory in King Abdullah Economic City.

In the first nine months of 2025, contracts were almost cut in half y-o-y, falling to USD 61.5 bn compared to USD 116.6 bn in 9M 2024.

Outlook remains positive despite the dip: The Kingdom still boasts the region’s largest pipeline with USD 887 bn in planned projects — nearly half of the GCC’s total. State oil firm Aramco also plans to roll out 99 new projects in the next three years to enhance its production capabilities. Meanwhile, the IMF has recently raised Saudi Arabia’s 2025 growth forecast to 3.5%.

REGIONALLY- The total value of awarded projects fell 27% y-o-y in 3Q 2025 to USD 54.8 bn, marking the second-weakest quarter in the last two and a half years. This regional drop was driven by slowdowns in Saudi Arabia and the UAE, with geopolitical concerns and rising costs impacting investor sentiment. Regional construction activity saw the sharpest contraction, falling 62.4% y-o-y to USD 11.1 bn.

  • The UAE registered the largest drop, with awards falling 65.8% y-o-y to USD 6.7 bn, placing it third in the region.
  • Qatar moved against the regional current, with its project awards increasing 115.9% y-o-y to USD 13.6 bn, bolstered by projects related to the 2030 Asian Games.
  • Kuwait also saw an uptick in activity, with awards climbing 33.8% y-o-y to USD 4.3 bn.

Looking ahead: Kamco anticipates a rebound in GCC project activity in 4Q, pointing to a substantial USD 1.78 tn pipeline.

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