Construction projects in the Gulf 2026: Deals expected to reach $400 billion
Recent economic reports have revealed strong positive indicators for the future of the construction sector in the Gulf Cooperation Council (GCC) countries, with forecasts pointing to an anticipated recovery in the volume of contracts and deals in the coming period. Despite a noticeable slowdown in the awarding of mega-projects, particularly in Saudi Arabia during 2024, the economic outlook holds the potential for massive construction deals that could reach a value of $400 billion, according to estimates by the global economic magazine MEED.
Analyzing the 2024 figures: A break for the warrior or a rescheduling?
Data showed a decline of approximately one-third in total deals signed in the Gulf countries, settling at $213 billion, compared to the previous year. Saudi Arabia experienced the largest drop, with the value of contracts falling from $164 billion to $84.5 billion. Despite these figures, the American news website Semaphore asserted that this decrease does not reflect a decline in strategic vision, but rather indicates a phase of reprioritization and a focus on quality execution. The website emphasized that the region is witnessing a genuine boom in construction projects, stretching from Kuwait in the north to Mecca in the south.
Economic context and Vision 2030
To understand this landscape more deeply, one must consider the region's historical and economic background. The Gulf states, led by Saudi Arabia, are undergoing a historic transformation aimed at reducing their reliance on oil as their sole source of income. Infrastructure and construction projects are the backbone of economic diversification plans such as Saudi Vision 2030. Mega-projects like NEOM, the Red Sea Project, and Qiddiya require enormous cash flows and complex timelines, making periods of slowdown a natural part of the long-term economic cycles of such projects, ensuring the sustainability of financing and supply chains.
Expected regional and international impact
The renewed momentum in the construction sector, with expected deals approaching $400 billion, is not only good news for local contractors, but also has positive effects on the global and regional economy
- Locally: This spending will boost the creation of thousands of jobs and stimulate supporting sectors such as cement, iron, and logistics.
- Regionally: It strengthens economic integration among the Gulf states, as the UAE, Qatar and Kuwait are witnessing continuous urban development that complements the scene in Saudi Arabia.
- Internationally: The Gulf region remains an attractive destination for foreign direct investment and for global engineering and technology companies seeking active markets amid a global recession in other sectors.
In conclusion, the forecasts reported by MEED indicate that the coming months will witness a course correction, as the third highest annual increase in construction spending was recorded, confirming the strength of the Gulf states’ financial solvency and their determination to move forward with comprehensive development plans.
