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22/08/2016

Infrastructure contract value decreased in July

Words: Laura Edgar
Office construction / Shutterstock_77042365

The first full month following Brexit saw a decline in the infrastructure sector, with the value of contracts for July falling to £1.5 billion.

This is a drop of 20 per cent compared with June, based on a three-month rolling average.

The August edition of industry analyst Barbour ABI’s economic and construction market review suggests that construction new orders were down to £5.8 billion in July, a month-on-month drop of £400 million.

Residential construction saw a decrease of 7 per cent and a drop of 2,000 units compared with June.

But the value of contracts for commercial office construction in July increased by 22 per cent compared with June, which equates to total worth of £648 million. An eight-storey office block in the West Midlands development Paradise Circus contributed £250 million to that total.

According to the review, the industrial sector returned its highest value in 2016 so far - £564 million. The commissioning of Reckitt Benckiser’s £100 million new global centre for scientific excellence in Kingston upon Hull contributed to this total.

Michael Dall, lead economist at Barbour ABI, said: “In the first full month since the vote to leave the European Union, the value of construction projects reaching contract award stage declined in July. This is unsurprising given the uncertainty in the economy. However, it is the infrastructure sector which has performed particularly poorly this month and with the change in narrative from the current government, it puts more emphasis on any fiscal stimulus that they may be planning to make.”

The economic and construction market review can be found here (pdf).

PICTURE CREDIT | SHUTTERSTOCK

 

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