An analysis of contracts awarded in the first 10 weeks of the year does not appear to support the theory, the market should be improving based on higher announced budget spending and improved average oil prices over the past 12 months. As of mid-March, just $15.7bn-worth of contracts had been awarded in the GCC, according to MEED Projects.
Extrapolated on a pro-rata basis for the remainder of 2019, this would translate into a total for the year of less than $80bn, considerably below the 2018 total of $98bn, which itself was the worst year for project market awards since 2004.
While the start of the year has not been particularly encouraging, the market can take heart from the rapidly growing backlog of projects in tender. There are more than $105bn-worth of individual contracts either out to bid or under bid evaluation across the GCC, which bodes well for the remainder of the year, given that it can be assumed that most of these projects have a good chance of being awarded over the coming months. The issue is not necessarily a shortage of schemes or tenders, but rather a delay in approving awards and allocating budgets.
According to MEED, the value of contracts awarded in the Middle East slumped to $6.7bn in February, from $10.5bn in January. The February value is also significantly lower than the same month last year, when $14.4bn of deals were signed.
Source from: The Peninsula