Saudi Arabia is top construction market in MENA

The Bank of America Merrill Lynch report, which monitored Meed contract awards data, highlights a potential pipeline of $374 billion projects to be awarded during the period 3Q12-2013 in the UAE, Qatar, Egypt and Saudi Arabia, of which 53.7% is to take place in Saudi Arabia. The total pipeline of construction and infrastructure project awards for the four countries stands at $157 billion and $110 billion (41.9% and 29.5% of the total, respectively), according to the report. 

In Saudi Arabia, the pipeline of construction and infrastructure project awards reach $90 billion and $39 billion, respectively (45% and 19% of total).

Total year-to-September broad MENA contracts awarded are moderately down year-on-year, though closing up the gap versus 2Q12 (where they were down by 40% year-on-year). While Kuwait and Iraq construction in particular pushed down the total, year-to-date contract awards in the UAE, Qatar and Saudi increased by 25% to $41 billion, according to the report.

Construction and infrastructure awards in the latter countries also increased by 16% to $18 billion year-to-date. Egypt continues to suffer from the aftermath of the Revolution with investments at their lowest levels in two decades. Over the past year, Egypt saw the largest number of projects cancelled and/or put on hold (seemingly evenly spread across the construction, infrastructure hydrocarbon, petrochemical sectors) while Qatar witnessed the largest increase in projects entering tender mode. The UAE appears to have turned a corner when it comes to severe project rationalisation or cancellations after $450 billion of these were put on hold between March 2010 and October 2011.