Saudi Arabia driving region's construction industry

Construction activity slowed in the MENA region in the first six months of the year with Iraq awarding more contracts than the UAE.

Saudi Arabia is main driver for the region's construction industry, the study by Citi Investment found. The kingdom assigned $11.4 billion (Dh41.8 bn) in construction contracts from June to July, representing 25 per cent of the deals in the MENA region, according to the report.

Iraq awarded $11 billion in contracts, primarily for development of a town outside Baghdad, Citi reports.

The UAE handed out contracts worth $9.1 billion in the first half of the year, compared to $15.6 billion in the same period of last year, a 41 per cent drop.

Qatar was one of the few countries in the region to show an increase, posting $6.9 billion in deals compared to $5.4 billion in the first half of last year.

Project awards in June were down 34 per cent from a year earlier.

"Overall project award growth is at its lowest rate since March 2010," the report said.

Egypt's construction industry was the most obvious victim of the region's political turmoil. Only $347 million worth of projects in the first six months of the year, "unsurprising given the country is still in the process of establishing political leadership," the report notes.

On the upside, there are more than $628 billion of projects in the project pipeline, up from 30 per cent from May, Citi reports. The UAE has $165 billion of deals in the planning stages, with most of the growth in the energy sector.

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