Value of major Gulf projects exceeds $2 trillion for first time

The MEED Projects index, which monitors investment within the construction, oil and gas, petrochemicals, power and water and waste sectors across the region, has risen in value by 40% over the past 12 months, despite fears that rising construction costs would lead to significant slowdown in the number of new projects being launched.

The UAE remains the biggest projects market in the Gulf, accounting for 37% of the total project value. It has also registered the highest growth, with total project values in the federation rising by 46% over the past 12 months. Kuwait has the highest proportion of unawarded contracts, representing over 90% of all projects planned.

Only a quarter of all projects tracked by MEED Projects are actually construction implying that there is another 3-5 years of further intensive construction activity to come.

There have been a series of major real estate projects announced in recent months, reinforcing the sector's dominance of the projects market and pushing the overall value beyond $2 trillion. Major new real estate projects include; Sudair Industrial City in Saudi Arabia at $40bn, Masdar City, Abu Dhabi - $22bn, Dilmunia mixed use development in Bahrain worth $4.2bn and Limitless' Al-Wasl development in Riyadh at $12bn.

MEED Projects current value of investment in the Gulf by sector:

Construction = $1,207bn
Industry = $70bn
Oil & Gas = $430bn
Petrochemicals = $135bn
Power = $134bn
Water & Waste = $40bn

Simon Howard, General Manager of MEED, said:

"Despite fears that the bubble might burst at any moment, business in the Gulf is still booming. The last 12 months have seen huge investment poured into the region, with such developments as Masdar City and Saadiyat Island allowing Abu Dhabi to emerge as a market packed with the potential to one day rival Dubai as the bustling tourism centre of the UAE. Furthermore, such stand out success in the UAE indicates that there is still room for copious more investment in the surrounding GCC countries."

"The $2 trillion worth of projects now registered on the MEED Projects database signifies a momentous landmark in the region's development."