The Mena recorded muted contract awards activity for the second month in a row in June, with $5.8bn of deals let compared with $4.3bn in May. The low level of contract awards over the past two months has led to the lowest-performing quarter for contract awards in the six years since 2014. An estimated $19.5bn of deals was let in the second quarter, compared with $24.4bn of contract awards in the first quarter, leading market intelligence platform MEED noted.
The $19.5bn of contract awards in the second quarter of 2019 is a percentage decline of 20 per cent compared with the $24.4bn of deals signed in the second quarter of 2018. This decline coincides with a clear downtick in Dubai’s construction market, which recorded a $4.5bn decrease in activity in the second quarter this year. This marks the first time the Dubai market has recorded a loss exceeding $2bn since 2011, when the emirate was struggling with the after effects of the global financial crisis
The MEED’s Gulf Projects Index shed 0.18 per cent, or close to $7bn, over the past month, with the total value of projects that are planned and under way across the eight countries reaching $3.84tn. This value is also down by 0.6 per cent compared to the same period in 2018 ($3.87tn). Iran lost the most, with active projects deflating by 6.16 per cent from $300.9bn to $282.4bn during the month. This is due mainly to the cancellation of several oil, gas and petrochemical schemes, including the facility planned by the National Iranian South Oil Company in Khuzestan. The Energy Ministry’s plan to build a combined-cycle power plant in the Sistan and Baluchestan Province has also been cancelled. Iran lost more than $50bn, a 15.2 per cent drop compared to the corresponding period last year, indicating that the reimposition of US sanctions on the state has started to adversely affect its capital spending.
With close to $62.5bn-worth of gas projects under execution, according to regional projects tracker MEED Projects, the Middle East and North Africa (Mena) region is one of the leading upstream natural gas markets globally.
