Editorial Article
The Gulf Is Still Pouring: How the Giga-Project Correction Moved Construction Chemicals Demand From Towers to Terminals
The most publicised construction project in the world stopped building its signature product in 2026, and Saudi cement sales rose 10% anyway. Those two facts are not a contradiction, and holding both at once is the only way to read the Gulf construction chemicals market honestly. The announcement layer came off. The pour layer did not. What changed is where it is being poured.
Pheonix Research sizes the GCC construction chemicals market at USD 5.84 billion in 2025, rising to USD 9.72 billion by 2033 — a stated compound annual growth rate of 6.8% across the 2026–2033 forecast window. The two endpoints alone compound at 6.6% a year over the eight years to 2033 (a Pheonix Research calculation: 5.84 rising to 9.72), so the trajectory is a mid-single-digit compounder, not a boom. For scale, that is 6.6% of a global construction chemicals market that Pheonix Research sizes at USD 88.0 billion in 2025 growing at 5.8% (a Pheonix Research calculation) — the Gulf is forecast to grow at a premium to the world market, not in line with it.
The question worth answering is not whether the premium exists. It is what the premium is now made of, because in 2026 the composition of Gulf construction demand changed faster than its size.
The announcement layer came off
In May 2026 NEOM halted further work on The Line — the 170-kilometre paired skyscrapers once projected at more than USD 1 trillion — until at least after 2030, and postponed tourism destinations along the Red Sea coast on the same timeline, with Trojena receiving no new investment before 2030 either. What continues is the practical, productive end of the programme: roughly USD 3 billion further into OXAGON, the industrial city and Red Sea port positioned as a trade and data-centre node. The 2030 population target for NEOM was cut again, to up to 100,000, having previously been reduced from 1.5 million to 300,000. The Mukaab in Riyadh was put on hold earlier in the year (Semafor, 22 May 2026).
Read as a signal about construction chemicals, that is a mix shift rather than a demand collapse. Vertical megastructure in a desert is a heavy consumer of high-specification waterproofing, admixtures and sealants — but so is a port, a gas processing train, an industrial city and a data hall, and the latter four carry more chemistry per cubic metre of concrete, because exposure class and design life, not floor count, are what drive specification.
The pour layer did not stop
The physical evidence is unambiguous. Saudi cement sales rose 10% year on year in 2025, materially outperforming the 5–6% that the sector had expected, and December 2025 dispatches of 5.1 million tonnes were the first year-on-year fall after eight consecutive months of gains (BSF Capital, Saudi Arabia Cement Chartbook, January 2026). Clinker inventory stood at 43.8 million tonnes, equal to 280 days of sales, down from 320 days a year earlier — a sector carrying roughly nine months of production in stock, which is what an oversupplied market looks like even while volumes grow.
The contract data behind that volume is equally concrete. Knight Frank put Saudi giga-project contract awards at USD 196 billion in 2025, up 20%, and projects Saudi construction output reaching USD 191 billion by 2029, a 29% increase on 2024. Diriyah alone let USD 5.9 billion of contracts in 2024 and a further USD 3.7 billion in the first eight months of 2025, with USD 14.5 billion commissioned and USD 45.6 billion still in the pipeline. In western Saudi Arabia 17 giga-projects carry USD 431.3 billion of announced investment since 2016, of which USD 57 billion has been awarded and USD 187.2 billion remains to be let (Knight Frank, Saudi Arabia Giga Projects Report 2025, via Arab News).
A pipeline that large is not a story about one cancelled linear city. It is a story about which end of the pipeline is being funded, and the award data for the region answers that precisely.
The mix rotated, and the rotation is the chemicals story
GCC project awards reached USD 204.1 billion in the first nine months of 2026, up 2.5% on the same period a year earlier. The aggregate conceals the turn. Third-quarter awards were USD 47.4 billion, down 37.3% on the USD 75.6 billion of the third quarter of 2025 (a Pheonix Research calculation). Within that quarter, construction remained the largest sector at USD 14.8 billion — 31.2% of awards (a Pheonix Research calculation) — but construction awards fell 44.7%, while gas awards rose 59.9% to USD 13.5 billion and chemical awards roughly quintupled to USD 3.5 billion. Gas and chemicals together accounted for 35.9% of third-quarter awards (a Pheonix Research calculation) — more than construction itself (Kamco Invest GCC Projects Market Update, based on MEED Projects data, via Arab News, 8 October 2026).
At country level the same rotation reads differently. Saudi Arabia’s nine-month awards fell 7.7% to USD 73.4 billion from USD 79.5 billion (a Pheonix Research calculation), while its gas awards rose 80.1%. The UAE’s quarterly awards fell 13.5% sequentially but its share of total GCC awards rose to 33% from 27.9%, helped by ADNOC’s USD 1 billion Umm Shaif gas-cap and pressure-boosting contract.
| Indicator | Latest reading | Change |
|---|---|---|
| GCC project awards, first nine months 2026 | USD 204.1 billion | +2.5% year on year |
| GCC awards, third quarter 2026 | USD 47.4 billion | -37.3% on USD 75.6 billion in Q3 2025 (calculation) |
| Construction awards, Q3 2026 | USD 14.8 billion | -44.7%; 31.2% of quarterly awards (calculation) |
| Gas and chemical awards, Q3 2026 | USD 13.5 billion and USD 3.5 billion | +59.9% and roughly fivefold; 35.9% of awards combined (calculation) |
| Saudi giga-project contract awards, 2025 | USD 196 billion | +20% |
| Saudi cement sales, 2025 | Dispatcher volume up 10% | Against 5–6% expected; clinker stock at 280 days of sales |
For a formulator or a waterproofing system supplier, that table is a portfolio instruction. Energy and industrial work specifies for chloride ingress, thermal cycling, hydrocarbon and chemical exposure, and design lives measured in decades rather than in a developer’s sales cycle. It pulls demand toward integral and crystalline waterproofing, anti-carbonation and anti-corrosion coatings, epoxy and polyurethane flooring, structural repair mortars, and admixtures tuned for high-ambient placement rather than for a 20-storey residential slab. It also pulls demand toward the specification desk, because industrial owners buy through engineering contractors and end-user standards rather than through a merchant channel.
Waterproofing is the place to watch that show up in value. Pheonix Research puts waterproofing systems at USD 26.4 billion in 2025, 30.0% of global construction chemicals value and growing at 6.2% a year to USD 42.7 billion by 2033 — faster than the category, precisely because durability, coastal and saline exposure and groundwater control are where the money is forced to go. The Gulf is the most saline, hottest, most groundwater-constrained version of that problem in the world, which is why regional demand can grow while residential tower starts fall.
Why this is not Europe, and why the premium is real
The contrast with Europe is not rhetorical. EU construction investment fell 2.5% in 2024 and 2.1% in 2025 in real terms, with only a 2.7% recovery forecast for 2026 (FIEC Statistical Report), and Germany recorded 23,900 corporate insolvencies in 2025, a decade high and 8.3% above 2024 (PwC Global Insolvency Report 2025/26). Europe’s construction chemicals demand is now driven by renovation obligations, life-cycle declarations and replacement — a compliance demand function. The Gulf’s is driven by capital expenditure and exposure class — an intensity demand function. They grow for different reasons and they break for different reasons.
The Gulf’s specific fragility is worth naming rather than smoothing over. The IMF cut its 2026 growth forecast for the Middle East and North Africa excluding Israel and the West Bank and Gaza to 1.4%, 2.3 percentage points below its October 2025 forecast, after strikes and precautionary shutdowns reduced oil output by an estimated 13 million barrels a day. A market whose growth has rotated from buildings into gas, chemicals and ports is a market whose growth is now levered to hydrocarbon capital spending and to trade routing — both of which are policy variables in a way that housing demand is not.
What to watch
Three markers will tell you within two quarters whether the 6.6% endpoint arithmetic holds.
- The construction share of quarterly awards. At 31.2% and falling, construction is no longer carrying the region’s award book. If the share stabilises while gas and chemicals normalise, the pipeline is broadening. If construction keeps falling faster than energy rises, the chemicals demand that follows buildings erodes first — admixtures and tile adhesives track poured volume, and they go before repair and protective coatings do.
- Cement volume against cement price. A sector holding 280 days of clinker in stock is a sector that competes on price. Price competition at the binder and concrete level is the mechanism by which a growing market compresses supplier margin, and it is what the Chinese accounts already demonstrate: Oriental Yuhong’s 2024 net profit fell 95.2% to CNY 108.2 million while revenue fell only 14.5%, and Keshun’s bad-debt provision equals 27.4% of gross receivables (a Pheonix Research calculation). Volume growth and profit growth are not the same variable.
- Whether the event pipeline holds. Expo 2030 in Riyadh and the 2034 FIFA World Cup are the parts of the programme with fixed, non-negotiable delivery dates, and they sit in the central and eastern regions where clinker inventory is already tightest. They are the most defensible demand in the region, and the most likely to be prioritised if spending is re-phased again.
The takeaway
The GCC construction chemicals market is not a growth story interrupted by a cancelled skyscraper, and it is not a boom that survived one either. It is a market that re-based its demand from vertical spectacle to industrial and energy infrastructure, at a moment when the volume base — cement dispatches up 10% — was still expanding. That re-basing raises the chemistry intensity of each dollar of construction while lowering the number of counterparties a supplier can invoice, and it moves the point of sale from the merchant to the specification.
Pheonix Research forecasts the market at USD 5.84 billion in 2025 rising to USD 9.72 billion by 2033. The number that decides whether that forecast is met is not the size of any single project. It is whether the region’s award book keeps rotating toward the work that needs the most chemistry per cubic metre — and whether suppliers are positioned in the products and the specification channels that the rotation rewards.
Frequently Asked Questions
How big is the GCC construction chemicals market?
Pheonix Research sizes the GCC construction chemicals market at USD 5.84 billion in 2025, rising to USD 9.72 billion by 2033 — a stated compound annual growth rate of 6.8% over the 2026–2033 forecast window. The two endpoints alone compound at 6.6% a year across the eight years to 2033 (a Pheonix Research calculation). That equals 6.6% of a global construction chemicals market sized at USD 88.0 billion in 2025 and forecast to grow at 5.8%.
Why is the GCC market growing faster than Europe?
Because the two regions are running different demand functions. EU construction investment fell 2.5% in 2024 and 2.1% in 2025 in real terms (FIEC), with Germany recording 23,900 corporate insolvencies in 2025, a decade high (PwC). European demand is driven by renovation obligations and life-cycle declaration rules. GCC demand is driven by capital expenditure and exposure class — gas, chemicals, ports, data centres and industrial work specifying for chloride ingress and thermal cycling — which carries more chemistry per cubic metre of concrete.
What changed in the GCC in 2026?
The composition of demand, not its size. NEOM halted further work on The Line until after 2030 and postponed Red Sea tourism destinations and Trojena investment, while about USD 3 billion continues into the OXAGON industrial city (Semafor, May 2026). In the same period Saudi cement sales rose 10% in 2025 against 5–6% expected (BSF Capital chartbook, January 2026), and GCC project awards reached USD 204.1 billion in the first nine months of 2026, up 2.5%, even as third-quarter construction awards fell 44.7% while gas rose 59.9% (Kamco Invest, MEED Projects data).
What does the mix shift mean for construction chemicals suppliers?
It moves the point of sale from the merchant channel to the specification desk, and it changes the product call. Industrial and marine exposure specifies integral and crystalline waterproofing, anti-carbonation and anti-corrosion coatings, epoxy and polyurethane flooring, structural repair mortars, and admixtures tuned for high-ambient placement — rather than the high-rise systems that built the region's reputation. It also concentrates the customer base in fewer, larger counterparties, which makes payment terms and contract quality as important as volume.