Construction projects awarded by Gulf states plunge, as Saudi Arabia pulls back spending
The Gulf region awarded $28.4bn in contracts in the second quarter of 2025, according to a July brief by KAMCO Investment, a Kuwait-based asset manager.
The overall value of all construction contracts awarded nosedived 58 percent compared to the same quarter last year.
Saudi Arabia led the plunge with contract awards falling 72.5 percent, and the UAE followed at 47 percent. The UAE overtook Saudi Arabia as the most active country in the Gulf region sealing new construction contracts.
"This downturn was primarily driven by a sharp contraction in project awards in Saudi Arabia, accompanied by a similarly weak performance in the UAE, which experienced a significant y-o-y [year-over-year] decline in contract awards during the period," the report said.
New MEE newsletter: Jerusalem Dispatch
Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters
The slump in commissioned projects comes amid a bevy of reports that suggest Saudi Arabia is curbing its ambitions on grand megaprojects designed to wean the country of its reliance on energy and diversify its economy.
Why Saudi Arabia can spend more money than it makes, even as oil prices drop Read More »
The kingdom has already had to scale back Neom, originally billed as a $1.5 trillion megacity project, which organisers claim will eventually be 33 times the size of New York City and include a 170km straight-line city known as "The Line".
Instead of 1.5 million people living in the city by 2030, Saudi officials now anticipate fewer than 300,000 residents. Meanwhile, only 2.4km of the city will be completed by 2030.
The Line is one part of Saudi Arabia's broader Neom project situated on its northwestern Red Sea coast that includes Red Sea resorts, industrial parks and a ski resort.
Last week, Semafor reported Neom is considering laying off up to 1,000 employees - an estimated 20 percent of its full-time staff. The website reported that Neom was weighing the layoffs as part of a broader overhaul that could also see more than 1,000 employees leave Neom's construction site on the kingdom's northwestern Red Sea coast, and relocate to Riyadh.
The wider Gulf region has been hit by falling oil prices. Brent, the international benchmark, was trading down about one percent on Tuesday at $68.53 per barrel. Oil prices have come down substantaily from their 2022 highs of around $100 per barrel.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Etihad
an hour ago
- Al Etihad
Multiply Group acquires majority stake in Tendam for Dh5.6 billion
23 July 2025 21:49 ABU DHABI (ALETIHAD)Multiply Group has announced the successful completion of its acquisition of a majority stake in Tendam, Spain's second-largest apparel group by market share. In a press release, the Abu Dhabi-based group said the deal, valued at Dh5.6 billion (€1.3 billion), marks the Multiply's first major European investment and significantly expands its footprint in the global retail and apparel this acquisition, Multiply now owns 67.91% of Castellano Investments S.À R.L., the holding company for Tendam Brands S.A.U. and its subsidiaries. The remaining shares are retained by CVC Funds and PAI Partners through their corporate vehicles Llano Holdings and Arcadian one of Europe's leading omnichannel apparel retailers, operates more than 1,800 points of sale across over 80 markets, including Spain, France, Portugal, the UAE, and Latin America. Its portfolio includes 12 diverse fashion brands such as Women'secret, Springfield, Cortefiel, and Pedro del Hierro, catering to a wide range of consumer transaction is expected to double Multiply Group's operational EBITDA and significantly deepen its exposure to consumer-focused industries. Tendam will now serve as the platform business for Multiply's Retail & Apparel on the acquisition, Samia Bouazza, Group CEO and Managing Director of Multiply Group, said:'This acquisition marks Multiply Group's strategic entry into the retail and apparel sector. By securing a controlling interest in a leading omnichannel platform, we are investing in a future-focused, high-performing business model backed by an outstanding management team.'She added, 'Built on strong, well-established owned brands, the platform offers the agility and vision to expand into new categories and scale emerging brands globally. With our expertise in creating synergies, deploying AI, and driving strategic M&A, we are poised to accelerate growth and unlock long-term value for our shareholders.'Multiply plans to drive Tendam's next phase of growth through further international expansion across Europe, Latin America, and the Middle East, and by embedding artificial intelligence into all areas of operations—from sourcing to customer engagement. It also intends to support targeted acquisitions to introduce new brands and Miquel, Chairman and CEO of Tendam, welcomed the new phase of growth, stating: 'Today we are starting a new era. Together, shareholders and management team will fully deploy the Tendam potential, extending our brands to new formats, markets and channels supported by advanced artificial intelligence and digital technology.' Tendam ended June 2025 with trailing 12-month sales of €1.4 billion and EBITDA post-IFRS 16 of €340.7 million, following steady growth since 2020 under a strong management team.
TECHx
an hour ago
- TECHx
Amazon to Acquire AI Wearables Startup Bee
Home » Startups » Amazon to Acquire AI Wearables Startup Bee Amazon has reached a deal to acquire Bee, a San Francisco-based startup that makes AI wearables. The company produces a $50 bracelet that records conversations and uses artificial intelligence to transcribe and summarize them. Bee's wristband can generate summaries, create to-do lists, and perform other tasks using the captured audio. The AI wearable can also be muted by users when desired. Amazon confirmed the acquisition on Tuesday after Bee CEO and co-founder Maria de Lourdes Zollo shared the news in a LinkedIn post. However, the company did not disclose the deal's financial terms and said it has not yet closed. A spokesperson for Amazon stated the company will work with Bee to give users more control over the devices. Zollo wrote that the company envisioned 'a world where AI is truly personal,' powered by technology that adapts to users' lives. Bee was founded in 2022 and is known for its AI-powered wristband. Amazon previously launched its own wearable, Halo, which was discontinued in 2023. This acquisition adds to Amazon's ongoing efforts in the AI wearables space. The company already offers Echo smart glasses embedded with Alexa. According to Zollo's post, Bee will join the devices group led by Amazon executive Panos Panay once the deal is finalized. The move follows broader trends in the AI wearables market. OpenAI recently acquired io, a startup founded by former Apple designer Jony Ive, in a $6.5 billion deal. Other startups have also entered the AI wearable segment, though results have varied. Much of Amazon's AI development continues within its Amazon Web Services division. Source: Reuters
Gulf Today
2 hours ago
- Gulf Today
Germany plans to play central role in rearming Europe
For Gundbert Scherf — the co-founder of Germany's Helsing, Europe's most valuable defence start-up — Russia's invasion of Ukraine changed everything. Scherf had to fight hard to attract investment after starting his company — which produces military strike drones and battlefield AI — four years ago. Now, that's the least of his problems. The Munich-based company more than doubled its valuation to $12 billion at a fundraising last month. 'Europe this year, for the first time in decades, is spending more on defense technology acquisition than the US," said Scherf. The former partner at McKinsey & Company says Europe may be on the cusp of a transformation in defence innovation akin to the Manhattan Project — the scientific push that saw the US rapidly develop nuclear weapons during World War Two. 'Europe is now coming to terms with defence.' Reuters spoke to two dozens executives, investors and policymakers to examine how Germany — Europe's largest economy — aims to play a central role in the rearming the continent. Chancellor Friedrich Merz's government views AI and start-up technology as key to its defence plans and is slashing bureaucracy to connect startups directly to the upper echelons of its military, the sources told Reuters. Shaped by the trauma of Nazi militarism and a strong postwar pacifist ethos, Germany long maintained a relatively small and cautious defence sector, sheltered by US security guarantees. Germany's business model, shaped by a deep aversion to risk, has also favoured incremental improvements over disruptive innovation. No more. With US military support now more uncertain, Germany — one of the biggest backers of Ukraine — plans to nearly triple its regular defence budget to around 162 billion euros ($175 billion) per year by 2029. Much of that money will go into reinventing the nature of warfare, the sources said. Helsing is part of a wave of German defence start-ups developing cutting-edge technology, from tank-like AI robots and unmanned mini-submarines to battle-ready spy cockroaches. 'We want to help give Europe its spine back," said Scherf. Some of these smaller firms are now advising the government alongside established firms — so-called primes such as Rheinmetall and Hensoldt — that have less incentive to focus primarily on innovation, given their long backlogs for conventional systems, one of the sources said. A new draft procurement law, expected to be approved by Merz's cabinet on Wednesday, aims to reduce hurdles for cash-strapped start-ups to join tenders by enabling advance payment to these firms, according to a version dated June 25, reviewed by Reuters. The law would also entitle authorities to limit tenders to bidders inside the European Union. Marc Wietfeld, CEO and founder of autonomous robots maker ARX Robotics, said a recent meeting with German defence minister Boris Pistorius hammered home how deep the rethink in Berlin goes. "He told me: 'Money is no longer an excuse — it's there now'. That was a turning point," he said. Since Donald Trump's return to the political stage and his renewed questioning of America's commitment to NATO, Germany has committed to meet the alliance's new target of 3.5% of GDP on defense spending by 2029 - faster than most European allies. Officials in Berlin have emphasized the need to foster a European defence industry rather than rely on U.S. companies. But the hurdles towards scaling up industry champions in Germany - and Europe more broadly - are considerable. Unlike in the United States, the market is fragmented in Europe. Each country has its own set of procurement standards to fulfill contracts. The United States, the world's top military spender, already has an established stable of defence giants, like Lockheed Martin and RTX, and an advantage in key areas, including satellite technology, fighter jets and precise-guided munitions. Washington also began boosting defence tech startups in 2015 - including Shield AI, drone maker Anduril and software company Palantir - by awarding them parts of military contracts. European startups until recently languished with little government support. But an analysis by Aviation Week in May showed Europe's 19 top defence spenders - including Turkey and Ukraine - were projected to spend 180.1 billion this year on military procurement compared, to 175.6 billion for the United States. Washington's overall military spending will remain higher. Hans Christoph Atzpodien, head of Germany's security and defence sector association BDSV, said one challenge was that the military's procurement system was geared toward established suppliers and not well suited to the fast pace that new technologies require. Germany's defence ministry said in a statement it was taking steps to accelerate procurement and to better integrate startups in order to make new technologies quickly available to the Bundeswehr. Annette Lehnigk-Emden, head of the armed forces' powerful procurement agency, highlighted drones and AI as emerging fields that Germany needs to develop. "The changes they're bringing to the battlefield are as revolutionary as the introduction of the machine gun, tank, or airplane," she told Reuters. Sven Weizenegger, who heads up the Cyber Innovation hub, the Bundeswehr's innovation accelerator, said the war in Ukraine was also changing social attitudes, removing a stigma towards working in the defence sector. "Germany has developed a whole new openness towards the issue of security since the invasion," he said. Weizenegger said he was receiving 20-30 Linkedin requests a day, compared to maybe 2-3 weekly back in 2020, with ideas for defence technology to develop. Some of the ideas under development feel akin to science fiction - like Swarm Biotactics' cyborg cockroaches that are equipped with specialised miniature backpacks that enable real-time data collection via cameras for example. Electrical stimuli should allow humans to control the insects' movements remotely. The aim is for them to provide surveillance information in hostile environments - for example information about enemy positions. "Our bio-robots — based on living insects — are equipped with neural stimulation, sensors, and secure communication modules," said CEO Stefan Wilhelm. "They can be steered individually or operate autonomously in swarms. In the first half of the 20th century, German scientists pioneered many military technologies that became global standards, from ballistic missiles to jet aircraft and guided weapons. But following its defeat in World War II, Germany was demilitarized and its scientific talent was dispersed. Wernher von Braun, who invented the first ballistic missile for the Nazis, was one of hundreds of German scientists and engineers transported to the United States in the wake of World War II, where he later worked at NASA and developed the rocket that took Apollo spacecraft to the Moon. In recent decades, defence innovation has been a powerful driver of economic progress. Tech like the internet, GPS, semiconductors and jet engines originated in military research programs before transforming civilian life. Hit by high energy prices, a slowdown in demand for its exports and competition from China, Germany's $4.75 trillion economy contracted over the last two years. Expanding military research could provide an economic fillip. "We just need to get to this mindset: a strong defense industrial base means a strong economy and innovation on steroids," said Markus Federle, managing partner at defence-focused investment firm Tholus Capital. Risk aversion among European investors had in the past disadvantaged startups, which struggled to get the capital they need to survive the 'valley of death' — the critical early stage when costs are high and sales low. But a boost in defence spending by European governments following Russia's invasion of Ukraine has investors looking for opportunities. Europe now boasts three start-ups with a unicorn valuation of more than $1 billion: Helsing, German drone maker Quantum Systems, and Portugal's Tekever, which also manufactures drones. "There's a lot of pressure now on Germany being the lead nation of the European defense," said Sven Kruck, Quantum's chief strategy officer. Germany has become Ukraine's second-biggest military backer after the United States. Orders that might once have taken years to approve now take months and European startups have had the opportunity to test their products quickly in the field, several sources said. Venture capital funding of European defence tech hit $1 billion in 2024, up from a modest $373 million in 2022, and is expected to surge even more this year. "Society has recognized that we have to defend our democracies," said Christian Saller, general partner at HV Capital, an investor in both ARX and Quantum Systems. Venture capital funding has grown faster in Germany than elsewhere, according to a data analysis by Dealroom for Reuters. German defence startups have received $1.4 billion in the last five years from investors, followed by UK, the data shows. Reuters
