The downward trend in the construction sector in Kuwait is expected to continue despite planned projects in the future due to the declining optimism about the market, which is pushing local contractors to search for projects in other GCC markets, reports Al-Qabas daily quoting economic reports.
A recent report by project monitor MEED indicated that $11.3 billion in construction and transportation contracts were awarded in 2016. This number was the highest in the past decade, driven largely by the signing of the contract for the new terminal of the Kuwait International Airport. A regional contractor told the magazine, “We are optimistic about the future prospects in the GCC, whether in Saudi Arabia, Qatar and the UAE. As for the markets of Oman and Kuwait, which are usually good markets for us, they are currently quiet unfortunately.”
The report stated that the negative sentiment is reflected in the data, as the construction market in Kuwait peaked in 2016, and since then, project opportunities for companies looking for new work have declined. The market has been rising steadily since 2012, when contracts worth $4.5 billion were awarded, followed by about $7 billion annually in 2013 and 2014.
On the other side of the peak, since 2016, the annual total of contracts awarded has steadily declined, and since 2019, between $1.5 billion and $2.5 billion have been awarded annually. By the end of July this year, there were $750 million in contract awards alone, indicating that 2022 could be the lowest in total in recent years.
The MEED report explained that with the slowdown in awarding of contracts, this has put pressure on the industry to downsize. “There hasn’t been a lot of new business going forward recently,” says an international contractor working in Kuwait. Bidding activity is quiet, so that is unlikely to change in the near future.” While the contractor wants more work, he understands why Kuwait would like to adopt a more cautious approach to spending, as previous schemes produced few obvious economic benefits.
© 2022 Arab Times Kuwait English Daily. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).