UAE Dominates GCC with 2.7x YoY Growth in 2023 Contract Awards
The UAE experienced the highest growth in contract awards among its Gulf peers in 2023, according to a report by Kamco Invest. The total value of projects awarded in the UAE increased 2.7 times year-on-year to reach $79.5 billion, compared to $29.7 billion in 2022. The country maintained its position as the second-biggest projects market in the GCC, increasing its share of total GCC projects awarded from 27.1% in 2022 to 37.9% in 2023. The UAE's projects market showed diversity, with growth in various areas of contracts awarded, reflecting the country's economic growth and diversification efforts.
The construction sector dominated new project awards in the UAE, representing 44.0% of total projects in 2023, reaching $35.0 billion, surpassing the $30 billion level for the first time since the 2008 global financial crisis. Notable construction projects included the $1.2 billion Saadiyat Lagoons project by Aldar Properties, covering 6.2 square kilometers and featuring the development of 1,102 villas. The gas sector ranked as the second-largest sector in terms of total contracts awarded in 2023, with $19.6 billion worth of contracts, while the water sector saw $5.6 billion in contract awards.
The UAE's success in diversifying its economy from oil was evident through projects awarded in the non-oil sector. The country hosted the COP28 global climate change conference during the year, contributing to its economic growth and diversification push. The UAE recorded $49.8 billion in absolute growth of contract awards from 2022 to 2023, the largest in the GCC during the year.
In the wider GCC region, project awards nearly doubled in 2023, reaching $209.7 billion compared to $109.7 billion in 2022. This marked the highest-ever aggregate value of yearly projects awarded in the GCC region. Looking ahead, Kamco expects the 2024 GCC project market to be at par with 2023 levels, citing a strong pipeline and ongoing reforms by regional governments to reduce dependence on oil revenues. The real GDP growth expectations for 2024 also reflect these efforts.
Overall, the UAE's robust performance in contract awards indicates a resilient and diverse economy, driven by strategic initiatives and a commitment to economic development beyond oil-related activities.
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By- Sahiba Suri
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