The Gulf projects market has lost momentum in 2025 after years of rapid expansion, with new contract awards across the Gulf Cooperation Council (GCC) falling by 39 per cent year-on-year in the first five months of 2025.
The total value of awards slipped to US$67 billion, down from US$110 billion during the same period in 2024, as governments across the region temper capital expenditure and adopt a more phased approach to delivery.
The slowdown has been spearheaded by Saudi Arabia, where its ambitious gigaproject programme — a driving force of regional construction since 2017 — is seeing contracts released at a more measured pace.
Still, industry analysts caution against interpreting the decline as an end to opportunity.
A vast pipeline remains in place across real estate, transport, aviation, sport, and public-private partnerships (PPPs), ensuring that construction activity remains among the busiest anywhere in the world.
Since the launch of Vision 2030, Saudi Arabia has announced five signature “gigaprojects”: Neom, The Red Sea Global, Diriyah, Qiddiya, and Roshn.
Each has attracted international attention for their unprecedented scale and ambition.
Yet, contracts from these schemes are now being awarded more selectively.
According to industry sources, clients are prioritising phased and event-driven projects, particularly in Riyadh, rather than wholesale capital commitments.
This strategy is evident in recent awards such as the Riyadh Metro Line 2 extension, worth an estimated US$800m-US$900m, awarded in July to the Arriyadh New Mobility Consortium led by Italy’s WeBuild.
The extension adds to the six-line metro network that partially opened in 2024 and underscores Riyadh’s infrastructure expansion in advance of upcoming global events.
Saudi Arabia has an unprecedented events pipeline, headlined by the AFC Asian Cup in 2027, Asian Winter Games in 2029, Expo 2030 in Riyadh, the FIFA World Cup in 2034, and the Asian Games in 2034.
These commitments are triggering billions of dollars in stadium and transport contracts. Notable awards in the past year include the Mohammed Bin Salman Stadium at Qiddiya, Jeddah Central Stadium, and major upgrades to Riyadh’s King Fahd Stadium.
More stadium contracts — including the 45,000-seat New Murabba Stadium and the 46,000-capacity National Guard Stadium — are expected to be awarded in the months ahead.
For Expo 2030, the state-backed Public Investment Fund has established Expo Riyadh Company and appointed US-based Bechtel as project management consultant.
The Expo masterplan covers 6 square kilometres and is estimated to require US$7-10 billion in construction spending.
While Saudi gigaprojects cool, the rest of the region is maintaining high levels of investment.
The UAE has nearly matched its 2024 spending pace and now leads the GCC in project awards.
Dubai continues to draw international developers with its luxury real estate boom, highlighted by new supertall and high-rise launches.
Authorities are simultaneously investing in transport, including the US$5.5 billion Blue Line Metro contract awarded late last year and ongoing tenders for the proposed Gold Line.
Aviation also remains a dominant sector.
Saudi Arabia is moving ahead with tenders for its planned King Salman International Airport in Riyadh, designed to handle 120 million passengers annually by 2030, while Dubai has launched major packages for the expansion of Al Maktoum International Airport (Dubai World Central), which will eventually replace Dubai International and offer capacity for 260 million passengers a year.
North Africa is also seeing event-driven growth.
Morocco, a co-host of the 2030 FIFA World Cup, is pressing ahead with a US$9.5 billion infrastructure drive, including airport expansions, high-speed rail, and stadium construction such as the 320m-dollar Grand Stade Hassan II in Casablanca.
As fiscal tightening reshapes priorities, governments are increasingly turning to the private sector. In Saudi Arabia alone, PPPs represented US$28.2 billion in awards in 2023 and remain a central delivery model for sectors such as power, water, housing, schools, and transport.
In July, local giant Acwa Power and partners signed agreements worth US$8.3 billion to deliver 15GW of new renewable capacity.
Other GCC and regional governments — including the UAE, Iraq, and Jordan — are similarly pushing PPP programmes, though not all initiatives have advanced smoothly.
Bahrain’s long-awaited metro PPP has yet to move forward following prequalification in 2023, underscoring the model’s uneven progress outside of power and water.
The GCC’s project slowdown does not mark the end of the region’s construction surge, but rather a shift into a more delivery-focused phase.
With hard deadlines looming for global events, and with transport and real estate schemes already underway, execution is now taking precedence over announcements.
The Middle East remains one of the world’s most dynamic construction markets, but the era of blanket project launches is evolving into a period defined by phased execution, PPP participation, and timely delivery of landmark events and infrastructure.