The latest edition
of the Economic & Construction Market Review from industry analysts Barbour
ABI, highlights the levels of construction contract values awarded in October
across all regions of Great Britain.
The overall contract
value for October was £7.1 billion based on a three month rolling average, a
small increase on September but the highest total monthly construction figure
for almost two years.
After
a positive summer for housebuilding with more than £7 billion of housing
contracts awarded between June and August, the sector experienced a cooler
autumn with figures decreasing by 10 per cent and falling for the second month
in a row.
The
large HS2 contracts commissioned in September worth £7.2 billion alone are
still having a major impact on overall figures, masking the slide in housing
construction contract value.
Across
the industry, project numbers were down in October by almost 10 per cent when
compared to the same time last year, indicating that a number of larger
projects were awarded within the month rather than a large succession of
smaller contracts. It was a mixed bag for various sectors this month with
industrial and medical & health construction joining housing as sectors
that saw a drop in contract value, at 16.2 and 9.9 per cent respectively.
Whereas infrastructure, commercial & retail and education all saw slight
increases on the month and hotel, leisure & sport construction saw a major
increase in monthly contract value of more than 50 per cent.
The
highest value project in October was the 1-5 Grosvenor Place - Belgravia valued
at £500 million, more than three times the value of the second highest placed
project, 340 flats & commercial units on Portugal Street in Manchester. 53
per cent of the value from the top ten biggest projects was located in London.
Regionally,
London took back the top spot with 25% of the total construction contract value
from the West Midlands, which benefited greatly in September thanks to the HS2
contracts. Joint second was the South East which contributed 14 per cent, which
included the £40 million McArthurGlen Retail Outlet in Kent, alongside the
North West which had the biggest residential project in October, the
aforementioned Portugal Street project in Manchester.
Commenting
on the figures, Michael Dall, Lead Economist at Barbour ABI, said: “It’s
evident that the major HS2 projects commissioned in September are masking an
underlying softening of activity in certain sectors of construction such as
housebuilding.
"Housing
has been driving overall industry growth across 2016 and parts of 2017 as
infrastructure lagged behind but is now flagging. Without the HS2 developments
we would be looking at a much bleaker picture in our results for October.”
