The value of awarded projects in Kuwait for the first three months surged to KD527 million ($1.71 billion), registering a 332% growth over last year, mainly driven by activity in the power sector which rose to its highest level in almost six years, according to the National Bank of Kuwait (NBK).
The value of awarded projects rose 78.3% quarter-on-quarter. Three months into 2023, and this figure is already equivalent to more than 70% of the total value of projects awarded last year, stated NBK in its economic update.
The acceleration was mainly due to projects in the power and water sectors, awarded by the Ministry of Electricity & Water (MEW).
According to NBK, the activity in the power sector was notably strong, rising to its highest level in almost six years, with KD150 million worth of MEW projects and KD 60 million of GCC Interconnection Authority (GCCIA) projects awarded.
These totaled KD236 million and accounted for 45% of total project awards in Q1, it added.
The top Kuwaiti bank said among the other key sectors, the transport sector continued its solid performance.
Total project awards came in at KD127 million, the bulk of which relate to road and infrastructure works on Sabah Al-Ahmad City by the Public Authority for Housing (KD110 million).
NBK said activity in the construction sector was firm, though it softened from the previous quarter. Total construction awards declined 33% q/q to KD104 million, it added.
Looking ahead to the rest of 2023, NBK in its report stated that the positive momentum could continue.
The partial recovery in the expatriate workforce in 2022 could point to some project mobilization and the government could in months to come prioritize an acceleration in development plan execution once parliamentary elections are completed, it stated.
For the time being, however, the domestic environment remains challenging with a projected decline in government capital spending outlined in the FY23/24 draft budget, a slowdown in the consumer-spending boom, relatively high costs of labour and construction materials, it added.
