Construction contracts awarded in the GCC increased a total of 11.4 per cent to reach US$142.4bn (Dh522.98bn) in 2009.
Surprisingly, despite the gloom and doom scenario, Q4 2009 recorded the highest value of contract projects awarded in 2009, totalling US$61.6bn, a 63 per cent increase from Q3 2009. The months of December and July 2009 witnessed the largest single-months construction contracts awarded in terms of value (see table). Just December witnessed an immense $45.8bn of contracts while July contracts were at US$24bn, according to the GCC Cement Sector Quarterly released by Global Investment House.
However, Q3 2009 witnessed the highest increase in construction awards, increasing by 209 per cent to reach US$37.7bn. The average contracts awarded in 2009 were US$11.8bn as compared to US$10.6bn in 2008.
But the concern is that supply exceeds demand. With more than US$2.28trn worth of projects as of December 2009 in the GCC, 26 per cent amounting to US$593bn have been put on hold.
"Remaining conservative, if out of these 74 per cent active projects, 45 per cent are business and construction related and run with an average cement price of US$70/t, we expect annual cement demand in GCC to be 93Mta during 2010-2017, whereas supply would cross 123Mta by 2011," warned the report.