After a volatile
2017 for construction, the year hasn’t begun much better for the industry in
January, with the value of new contracts awarded at £5.4 billion, 10.6 per cent
lower than
the same time last
year, as a lack of major projects has hit growth prospects.
The latest edition
of the Economic & Construction Market Review from industry analysts Barbour ABI,
highlights levels of construction contract values awarded in 2017 across Great
Britain.
Residential housing
and infrastructure both dominated the construction sector across January, with
contract values at £1.9 billion and £1.7 billion respectively, which combined,
is more than 65% of the total value of construction in the month.
The largest project
in January was the £800 million Spire London Hertsmere House development at
West India Quay in London, more than four times larger than the next biggest
development.
Eight of the biggest
ten projects in January came from the residential housing or infrastructure sector, albeit
smaller in value than the ‘big ticket’ projects regularly seen. These included
the £200 million Wednesbury
to Brierley Hill Metro Extension and the £100 million Waste Water Treatment
Works in Blackburn.
Across the industry,
education and hotel, leisure & sport sectors both saw monthly decreases in
value in January, which could be seen as particularly concerning due to
December being traditionally a
quiet month. The remaining sectors of residential housing, infrastructure,
commercial & retail, industrial and medical & health all saw increases
on the previous month but overall below the
levels of January 2017.
Regionally, it was
London that led all regions with contract award value at 32% of the UK total,
largely thanks to the aforementioned £800 million Spire London Hertsmere House
development at West India Quay in London. This was followed by the North West with
13% of contract awards and Scotland with an 11% share.
Commenting on the
figures, Michael Dall, Lead Economist at Barbour ABI, said: “The recent
collapse of Carillion has not done much for confidence in the sector, which is
already facing a number of headwinds. Mainly due to a lack of major projects,
construction has been held back in January.
"Nevertheless,
encouraging figures from the residential housing and infrastructure sector is
pleasing, but other sectors now need to help pick up the slack, such as hotel,
leisure & sport which produced its
lowest figures in January since October 2015."
