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24/08/2015

Infrastructure contract values on the rise

Words: Laura Edgar

Values for infrastructure contracts have increased by almost 90 per cent in one year, according to the latest figures.

The Economic & Construction Market Review, compiled by Barbour ABI, which supplies construction data to the Office for National Statistics, Cabinet Office and Treasury, shows that based on a three- rolling average, the value of contracts awarded reached almost £2 billion. This, according to the report, is 88.5 per cent higher than July last year.

The two largest infrastructure projects awarded were an extension to the Burbo Bank offshore wind farm in Liverpool Bay, worth £250 million and a £200 million energy-from-waste facility in Beddington.

July saw the highest proportion of construction contracts awarded by value, with 27 per cent by total. The residential sector was second, with 26 per cent of total contract value.

The North-West dominated the regional infrastructure activity, with 32 per cent of all contract values, an increase of nearly 25 per cent when compared with last year. Projects in the North-West include the Burbo Bank extension and M6 motorway junction 16-19 development.

Michael Dall, lead economist at Barbour ABI, said spending on road projects and the increased number of renewable energy projects has “propelled infrastructure to become the top-performing sector in construction for July”.

“It is evidence that the projects proposed by the government are starting to have an impact on the construction industry, though it is important that these move from contractor appointed to spades in the ground for the full effect to be realised.”

However, Ball said construction is still behind its pre-recession peak by 3.2 per cent. “The commissioning of the large-scale infrastructure projects that we have seen in July is encouraging, but this momentum must continue to ensure growth is sustained.”

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