GCC projects slow in Q1 2026; Kuwait emerges as regional growth leader
Regional uncertainty hits Gulf contracts, but Kuwait records fivefold surge in project awards, defies downturn with strong expansion
A recent report by Kamco Invest highlighted a slowdown in project activity across the Gulf Cooperation Council (GCC) during the first quarter of 2026, driven by heightened regional uncertainty.
According to data published by MEED magazine, the total value of contracts awarded across GCC countries fell by 9.7% year-on-year to $61.2 billion, compared with $67.8 billion in the same period of 2025.
The decline was primarily attributed to weaker project awards in Saudi Arabia and the United Arab Emirates, the region’s two largest markets. In contrast, Kuwait, Oman, and Qatar recorded notable growth in project activity during the quarter, reports Al-Rai daily.
The report showed a sharp monthly fluctuation in contract awards, which dropped from 84 projects in January to 80 in February, before falling significantly to 25 projects in March 2026.
In value terms, awards declined from $20.5 billion in January and $26 billion in February to $11.8 billion in March.
Saudi Arabia saw a 51.1% annual decline in project awards, totaling $11 billion compared to $22.5 billion in 2025. The UAE also recorded an 18.5% drop to $29.2 billion, down from $35.8 billion.
In contrast, Kuwait delivered a standout performance, with the value of awarded projects increasing more than fivefold to $8.1 billion, compared with $1.5 billion in the same period last year. This marks the country’s highest quarterly level in over five years.
The strong performance in Kuwait was driven by major projects aligned with national development goals under Kuwait Vision 2035, particularly in the energy, electricity, water, and transport sectors.
The water sector alone accounted for more than 45% of Kuwait’s total project value at $3.7 billion, followed by construction at $2.6 billion. The oil sector also surged significantly, rising 36-fold year-on-year to $1.5 billion.
Among key developments, the North Kabd wastewater treatment plant project, valued at $3.2 billion, stands out as one of the largest infrastructure initiatives, with a capacity of around one million cubic meters per day. The quarter also saw a $320 million contract awarded for crude oil pipelines and associated works in southern Kuwait.
Despite pockets of growth, the broader outlook for GCC projects remains cautious. The report warned that ongoing regional conflict and geopolitical instability could weigh on future investments and project financing.
MEED estimates the total value of future GCC projects at approximately $2 trillion, with Saudi Arabia accounting for around 50% and the UAE 27.5%. Construction remains the dominant sector, followed by transport and electricity.
In Kuwait, future project pipelines are strongly supported by government-backed infrastructure initiatives and economic diversification plans, reinforcing its emerging position as one of the fastest-growing project markets in the region.
