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Contract awards remained stable in March

Words: Laura Edgar
Hotel / Shutterstock: 664825699

Contract awards values increased by 22 per cent to £5.8 billion in March 2021, compared with February.

This was driven by an increase in activity in the hotel and leisure sector, with contract awards values reaching £1.0 billion. The planning approvals activity Barbour ABI highlighted in December and January converted to contract awards.

Industry analysts Barbour ABI's latest Economic & Construction Market Review found that residential contract awards “remained stable” in March at historical average levels, after picking up in February.

Activity has been recorded at £2 billion for March, up from £1.9 billion February and £1.6 billion in January. The average for residential contracts in 2020 was £1.7 billion.

Tom Hall, chief economist at Barbour ABI and AMA Research, said: “After a weak recovery over the second half of 2020 and the beginning of 2021, March saw a definite improvement across the planning environment. Importantly, increases were seen in the commercially sensitive sectors of hotel and leisure in contract awards, and residential and commercial in planning approvals.

“However, this is only one month of improvement and the planning environment is notoriously volatile. The catch-up of ‘lost’ contract awards since the start of the pandemic amounts to some £15 billion of projects, or around 20-25 per cent of the annual contract award value. We would therefore expect a significant amount of catch-up over the next couple of months as the economy reopens to strengthen a currently weak construction pipeline.

“This is some much-needed positive news for the sector after an exceptionally challenging 12 months.”

Image credit | Shutterstock