Saudi Arabia, UAE to Lead Gulf Project Awards Despite Rising Costs

Saudi Arabia and the UAE are projected to lead project awards in the Gulf during the latter half of 2026, pushing forward significant investment plans. This comes despite rising shipping, insurance, and construction costs exacerbated by the Iran conflict. A report by Abu Dhabi Commercial Bank, cited by Asharq Bloomberg, indicates a substantial pipeline of projects, with major initiatives becoming more visible towards the end of 2026 and into 2027.

The continued investment in large-scale projects by Saudi Arabia and the UAE indicates a robust construction and infrastructure market in the GCC, defying cost escalations. This sustained project activity will likely maintain demand for raw materials, construction services, and associated financial instruments. The focus on mega-projects in key economic hubs suggests continued regional growth and diversification away from oil and gas revenues, though oil and gas contracts are still expected.

The anticipated surge in project awards in Saudi Arabia and the UAE will create significant opportunities for equipment dealers, particularly those supplying earthmoving and construction machinery. Projects like the Al Maktoum International Airport expansion, TA’ZIZ industrial chemicals zone, and Riyadh Metro Line 7 will require extensive fleets. Dealers should prepare for increased demand, potentially facing supply chain and logistics challenges due to higher shipping and insurance costs. Proactive engagement with project contractors and government entities will be crucial.

This development underscores the Central role of Saudi Arabia and the UAE in driving economic growth and infrastructure development across the Gulf Cooperation Council (GCC). Their commitment to ongoing projects, even amidst regional geopolitical tensions and rising operational costs, positions them as key anchors of stability and investment in the region. The UAE notably recorded the highest absolute value of awards in the Gulf during the first half of 2026, reinforcing its leading position.