The Gulf contract slowdown shaped project activity across GCC markets during the first nine months of 2025. Overall, awarded contracts declined sharply compared to the same period last year. As a result, total contract values reached $154.4 billion across most Gulf countries. In contrast, awards reached $222.2 billion during the first nine months of 2024.
Moreover, the overall decline reached 30.5 percent year on year. This drop reflected slower project approvals and delayed investment decisions. Additionally, several governments reviewed spending plans after recent record expansions. Therefore, project momentum softened across multiple sectors and markets.
Meanwhile, the third quarter confirmed the broader regional slowdown. During that period, total project awards fell 27 percent year on year. Consequently, awarded contracts reached $54.8 billion during the quarter. This level ranked as the second-lowest quarterly figure in ten quarters.
Furthermore, four of the six GCC states recorded annual declines during the third quarter. According to Kamco Invest, only Qatar and Kuwait avoided declines in project values. However, all other Gulf markets reported reduced award activity. Thus, regional performance remained uneven across member states.
At the same time, most GCC countries experienced annual decreases in awarded contracts. Only Kuwait and Qatar resisted the broader downward trend. In contrast, Bahrain, Saudi Arabia, and the UAE recorded notable declines. These results reflected shifting development schedules and sector adjustments.
Analysts linked the slowdown to heavy spending during the previous two years. During that period, Gulf states launched massive oil and gas infrastructure projects. Notably, Saudi Arabia alone announced gigaprojects exceeding one trillion dollars. However, current conditions encouraged caution and phased execution.
From a sector perspective, six of eight major sectors recorded annual declines. The construction sector faced the steepest drop across the region. Specifically, awarded construction contracts fell 62.4 percent year on year. As a result, values dropped to $11.1 billion during the third quarter.
Similarly, the energy sector also recorded weaker performance. Awarded energy contracts declined 13.3 percent year on year. Consequently, values reached $17.1 billion during the quarter. Together, construction and energy drove much of the overall decline.
In contrast, oil and gas remained the only sectors showing growth. These sectors benefited from long-term energy demand and export strategies. Nevertheless, all other sectors recorded declines across regional markets. This trend affected projects in Qatar, Bahrain, and Saudi Arabia alike.
Looking ahead, analysts expect cautious recovery rather than rapid growth. Governments continue prioritizing efficiency and fiscal balance. However, strategic energy projects may sustain selective activity. Still, the Gulf contract slowdown remains a defining feature of 2025 markets.
