Housebuilding continues to bolster construction
The latest edition of the Economic & Construction Market Review has been released by industry analysts Barbour ABI, showing that housebuilding is continuing to prop up the industry.
The value of construction contracts in October reached £5.4Bn, with housebuilding providing £2Bn worth of contract value. The latest figures also record a 3.8% drop in contract value from September.
The largest project in October was the £350M Keadby 2 Power Station, over three times the value of the second largest project on the month. With three of the top five largest projects in October based in London, the capital accounts for the largest share of contracts awarded within the month, with a total of 17.2%, followed by the North West and Yorkshire & Humberside with 16.6% and 16.1% respectively.
Medical and health projects followed housing, reaching some £250M, its best month statistically for more than two years and a 230% increase on September. Some 91% of these projects were for public hospitals, such as the £90M contract awarded to Laing O’Rourke to finish the Royal Liverpool Hospital redevelopment after the collapse of Carillion.
Infrastructure, traditionally one of the two largest sectors alongside residential, saw an increase in contract value by 6.9% taking its monthly total to £1.3Bn. However commercial & retail, hotel, leisure & sport, industrial and education construction sectors all saw decreases across the month.
Commenting on the figures, Michael Dall, Lead Economist at Barbour ABI, said: “There is no doubt that the strength of housebuilding is substantially helping improve the overall figures for the construction industry. With a shortage of homes across Great Britain and an influx of buyers helped by schemes such as help-to-buy has propelled the sector and kept developers busy to keep up increasing expectations to build more homes. Nevertheless, as Brexit continues to be discussed and negotiated, the lack of clarity on the matter for the remaining sectors seems to have influenced the total amount and value of contracts.”
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