Construction projects awarded by Gulf states plunge, as Saudi Arabia pulls back spending
The Gulf region awarded $28.4bn in contracts in the second quarter of 2025, according to a July brief by KAMCO Investment, a Kuwait-based asset manager.
The overall value of all construction contracts awarded nosedived 58 percent compared to the same quarter last year.
Saudi Arabia led the plunge with contract awards falling 72.5 percent, and the UAE followed at 47 percent. The UAE overtook Saudi Arabia as the most active country in the Gulf region sealing new construction contracts.
"This downturn was primarily driven by a sharp contraction in project awards in Saudi Arabia, accompanied by a similarly weak performance in the UAE, which experienced a significant y-o-y [year-over-year] decline in contract awards during the period," the report said.
New MEE newsletter: Jerusalem Dispatch
Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters
The slump in commissioned projects comes amid a bevy of reports that suggest Saudi Arabia is curbing its ambitions on grand megaprojects designed to wean the country of its reliance on energy and diversify its economy.
Why Saudi Arabia can spend more money than it makes, even as oil prices drop Read More »
The kingdom has already had to scale back Neom, originally billed as a $1.5 trillion megacity project, which organisers claim will eventually be 33 times the size of New York City and include a 170km straight-line city known as "The Line".
Instead of 1.5 million people living in the city by 2030, Saudi officials now anticipate fewer than 300,000 residents. Meanwhile, only 2.4km of the city will be completed by 2030.
The Line is one part of Saudi Arabia's broader Neom project situated on its northwestern Red Sea coast that includes Red Sea resorts, industrial parks and a ski resort.
Last week, Semafor reported Neom is considering laying off up to 1,000 employees - an estimated 20 percent of its full-time staff. The website reported that Neom was weighing the layoffs as part of a broader overhaul that could also see more than 1,000 employees leave Neom's construction site on the kingdom's northwestern Red Sea coast, and relocate to Riyadh.
The wider Gulf region has been hit by falling oil prices. Brent, the international benchmark, was trading down about one percent on Tuesday at $68.53 per barrel. Oil prices have come down substantaily from their 2022 highs of around $100 per barrel.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Zawya
an hour ago
- Zawya
Kuwait oil price up 79 cents to $71.65 pb
KUWAIT -- The Kuwaiti oil price rose by 79 cents to US 71.65 per barrel (pb) on Thursday, compared with USD 70.86 pb on Wednesday, said the Kuwait Petroleum Corporation (KPC) on Friday. Globally, price of Brent crude went up by 67 cents to USD 69.18 pb, and West Texas Intermediate crude rose by 78 cents to USD 66.03 pb. All KUNA right are reserved © 2022. Provided by SyndiGate Media Inc. (
Campaign ME
an hour ago
- Campaign ME
Sarsan Aviation Academy picks Magic Mango MENA to lead digital strategy
Sarsan Aviation Academy, one of the region's leading aviation training institutions, has officially partnered with Magic Mango MENA, a UAE-based integrated communications agency, to lead its social media and paid media strategy across digital platforms. The strategic collaboration aims to mark a significant step forward in Sarsan Aviation Academy's mission to inspire and train the next generation of aviation professionals. By aligning with Magic Mango MENA, the academy aims to strengthen its digital visibility, engage aspiring aviators, and reinforce its positioning as a premium aviation training provider in the region. 'Digital communication plays a pivotal role in connecting with today's youth and aviation enthusiasts,' said Ayesh Shanah, Managing Director at Sarsan Aviation Academy. 'Partnering with Magic Mango enables us to not only amplify our brand presence online but also drive enrolment and awareness through meaningful, creative, and data-driven campaigns.' Magic Mango MENA will take the lead on developing and executing a comprehensive digital strategy, encompassing organic social media content, community engagement, and targeted paid media campaigns. The goal is to build a strong and consistent brand narrative that resonates with prospective students, parents, and aviation professionals alike. 'We are excited to work with a forward-thinking institution like Sarsan Aviation Academy,' said Vicks Vikneshwaran, Director at Magic Mango MENA. 'The aviation sector is incredibly aspirational, and our job is to reflect that through compelling storytelling and performance-driven digital activations that spark interest, trust, and action.' This partnership is expected to run across multiple touchpoints and platforms in an effort to usher in a new era of visibility and engagement for the Academy.
Fintech News ME
2 hours ago
- Fintech News ME
MENA Startup Funding Hits US$2.1 Billion in H1 2025
Startup funding in the Middle East and North Africa (MENA) reached US$2.1 billion during the first half of 2025, with 334 deals recorded across the region. This marks a 134% increase compared to the same period in 2024. While part of the growth was driven by an increase in debt-based financing, the figures reflect a notable level of investor activity amid persistent regional uncertainty. The second quarter ended with US$583.4 million invested across 149 deals, surpassing both the value and volume recorded in Q2 2024. Despite a slowdown in June, the quarter's performance indicated continued investor appetite for regional startups. Market conditions remained difficult in the first half of the year. Currency fluctuations, geopolitical tensions and volatile commodity prices, particularly in gold, oil and the US dollar, all contributed to an unpredictable environment. Nonetheless, several venture capital firms remained active, investing with caution. Fintech drew the highest amount of capital in Q2, with 38 startups raising a total of US$170 million. Proptech followed with US$77 million across eight deals, while the traveltech sector raised US$40 million through two transactions. Saudi Arabia recorded the highest funding volume during the quarter, overtaking the UAE. A total of US$231.5 million was invested in 38 Saudi startups, compared to US$197.7 million across 52 UAE-based companies. Egypt ranked third, attracting US$133 million through 30 transactions. By stage, mid-stage startups received the largest share of capital, with 10 Series A rounds totalling US$161 million. Early-stage companies accounted for the majority of deals, with 67 transactions recorded. Only four debt deals took place during the period, alongside two later-stage equity rounds. Total investment in H1 2025 reached US$2.1 billion, a substantial increase from US$898 million in H1 2024. However, excluding debt financing, which contributed US$930 million, the year-on-year growth narrows to 53%. The increase in funding coincided with renewed international interest in the region following a visit from US President Donald Trump, who was accompanied by a group of major Silicon Valley investors. The visit was widely seen as a signal of strategic interest in the region's technological infrastructure and market potential. Saudi Arabia accounted for approximately 64% of total capital deployed across MENA during the first half of the year. Investment volume in the Kingdom rose 342% year on year, driven by a policy-backed ecosystem and consistent government support. Fintech was the leading sector in Saudi Arabia, securing US$969 million across 20 deals. Contech and proptech followed with US$48 million and US$39 million respectively. Local venture capital firms received support from sovereign wealth funds, while government incentives attracted international startups and technologies. Male-led ventures continued to dominate the funding landscape. However, three female-founded startups in Saudi Arabia raised a total of US$60 million, and mixed-gender founding teams secured US$34 million across seven transactions. Domestic firms such as STV, Wa'ed Ventures and Raed Ventures led funding activity in the Kingdom. Foreign participation was also present, including JPMorgan's involvement in a debt round raised by Lendo, which signalled institutional interest in Saudi fintech. The UAE recorded steady growth despite competitive regional pressure. In H1, 114 UAE-based startups secured US$541 million, an 18% increase compared to the previous year. Debt made up 19 percent of this total, suggesting a relatively stronger equity market. Fintech led sectoral funding in the UAE with US$265.8 million raised across 35 deals. Insurtech followed with US$55 million from five transactions. Web3 and AI companies each raised US$44.7 million, through 11 and 13 startups respectively. Eight female-led startups in the UAE raised US$17.6 million, while mixed-gender teams secured US$91.7 million. Startups founded exclusively by men received the majority of capital. Egypt recorded a 106 percent year-on-year increase in startup funding, with US$179 million raised across 52 deals. This growth came despite continued macroeconomic strain, including external debt reaching 38.8% of GDP by the end of 2024. Debt financing accounted for 13% of activity in the market. In contrast to Saudi Arabia and the UAE, Egypt's most funded sector was proptech, which attracted US$75 million through three deals. Fintech companies raised US$85.3 million across 10 transactions, and e-commerce startups secured US$24.8 million across seven. Female-founded ventures in Egypt raised a total of US$425,000, while mixed-gender teams secured US$23 million. The remaining capital went to 37 startups led exclusively by men. Across the MENA region, fintech remained the top-funded sector in H1, attracting 62% of all deployed capital through 77 deals. Two of the three largest deals recorded during the period were directed toward fintech firms. A single large investment in iMena Group boosted venture studios to second in terms of capital raised, followed by proptech, which attracted US$119 million across 16 companies. E-commerce startups raised US$65 million in 24 deals. Debt instruments played a significant role in shaping funding trends in H1, accounting for approximately 44% of total capital or US$930 million. This reflects a shift in investor behaviour in response to wider global economic uncertainty. Early-stage companies, from pre-seed to Series A, attracted US$568 million in funding, while later-stage companies, ranging from pre-Series B to pre-IPO, raised US$431.7 million. Despite mid-stage rounds capturing the largest share by value, early-stage startups remained dominant in terms of deal count. Business-to-business models drew the most investor interest, with B2B startups raising US$1.5 billion across 197 transactions. This represented 70% of total funding in the first half. The remainder was allocated to B2C or hybrid startups. Funding distribution across genders remained uneven. Startups founded exclusively by men received nearly 89% of total H1 capital. Female-founded companies raised a combined US$84.5 million across 27 deals, while mixed-gender teams secured US$150 million.
