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Construction growth sees a slowdown in January

Words: Laura Edgar
Construction contract values / iStock-482489106

The value of construction contracts awarded in January 2018 was £5.4 billion, 10.6 per cent lower compared with a year earlier.

According to the latest edition of the Economic & Construction Market Review from industry analysts at Barbour ABI, residential housing and infrastructure dominated the construction sector in January 2018.

There were £1.9 billion worth of residential housing and £1.7 billion worth of infrastructure contracts awarded, amounting to 65 per cent of the total value of construction for the month.

The largest project in the first month of 2018 was the £800 million Spire London Hertsmere House development at West India Quay in the capital, which is worth more than four times the next biggest development.

Eight of the biggest 10 projects were residential housing or infrastructure, although according to Barbour ABI, they were smaller in value than those regularly seen. The projects include the £100 million Blackburn Waste Water Treatment Works and the £200 million Wednesbury-to-Brierley Hill Metro Extension.

The report notes that the education and hotel, leisure and sport sectors saw monthly decreases in value in January. The residential housing, infrastructure, commercial and retail, industrial and medical & health sectors all saw increases on December 2016 – traditionally a quiet month. However, the values were, overall, lower than the levels of January 2017.

London had a contract award value at 32 per cent of the UK total, the North West had 13 per cent of contract awards, and Scotland saw an 11 per cent share.

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 are 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.”

Economic & Construction Market Review can be found on the Barbour ABI website (pdf).

Image credits | iStock and Barbour ABI