GCC Contract Awards Declined Sharply in Third Quarter
The value of project contracts across the GCC fell 37.2% year-on-year to $47.4 billion in the third quarter.
Updated on Oct. 7, 2026 in Construction
Live Poll
Do you feel local infrastructure and project development in your area is heading in the right direction?
GCC contract awards dropped to $47.4 billion in the third quarter of 2026, marking a 37.2% decrease compared to the same period in 2025. This slowdown reflects broader economic pressures and regional instability impacting project timelines.
Why it matters
Geopolitical tensions, disruptions in energy exports, and security threats to regional energy infrastructure have led to a widespread slowdown in major project approvals. This volatility has forced a contraction across the construction sector, offsetting growth seen in specific chemical and gas initiatives.
GCC contract awards fell 19.2% on a quarterly basis, with construction sector awards declining 44.7% year-on-year to $14.8 billion. While the total value for the first nine months reached $204.1 billion, individual nations like Oman saw a 96.6% decline.
The players
Saudi Arabia
This nation remains the largest project market in the GCC and awarded $24.4 billion in contracts during the third quarter.
UAE
As the secondary project market in the region, the country awarded $15.6 billion in contracts during the quarter.
Oman
This country experienced the steepest decline in the region, recording a 96.6% year-on-year drop in awards.
The details
While overall project activity stalled, the chemical and gas sectors proved resilient, with chemical awards climbing to $3.5 billion and gas awards jumping 59.9% to $13.5 billion. Despite this, all six GCC nations faced double-digit annual declines, with only Qatar and Bahrain managing to record increases on a quarterly basis.
Timeline
Q3 2025: GCC contract awards reached $75.6 billion.
First nine months 2025: Total GCC awards were $199.1 billion.
Q3 2026: GCC contract awards totaled $47.4 billion.
First nine months 2026: Total GCC awards hit $204.1 billion.
2027: The GCC economy is forecast to grow 5.8%.
Market Landscape
The current downturn in construction awards follows the trajectory of a forecasted 6.4% contraction in the GCC economy for 2026. This data underscores a pivot in regional capital priorities as energy sector volatility creates a shift away from traditional building projects.
The contraction in major project awards may lead to reduced industrial capacity growth, potentially affecting long-term regional employment trends in the construction sector. Consumers and investors should expect shifts in development pipelines as regional firms navigate these macroeconomic headwinds.
The takeaway
The sharp decline in contract awards highlights the vulnerability of regional development to energy market stability and geopolitical shifts. Investors should watch for a rebound in 2027, as current economic forecasts anticipate a return to growth following the expected 2026 contraction.
Further reading
For more on the latest trends in the region, visit the Construction section.
Live Poll
Do you feel local infrastructure and project development in your area is heading in the right direction?
