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05/08/2020

Year-on-year decline in construction contract awards

Words: Laura Edgar
Decline / iStock-163210926

Based on a three-month rolling average, the value of construction contract awards in June was £2.2 billion – 57.3 per cent lower than the same month in June 2019.

It is also 9.2 per cent less than May 2020.

According to Barbour ABI’s latest Economic & Construction Market Review of Great Britain, the number of contracts awarded in June 2020 was 81,4 per cent more than in May, totalling 477.

The residential sector had a 33.9 per cent share of the contracts awarded, while the largest project awarded was the in the infrastructure sector – the refurbishment of Gatwick Airport railway station refurbishment is valued at £150 million.

The analysis suggests that London had the largest share of contracts awarded in June at 26.1 per cent. The South East accounted for 16.4 per cent and the North West 13.6 per cent. Wales accounted for the smallest percentage of awards at 1.4 per cent.

Tom Hall, chief economist at Barbour ABI and AMA Research, said: “The UK economy
plateaued in May as the easing of some lockdown restrictions mid-way through the month failed to significantly increase output. In-month GDP growth was 1.8 per cent after the 20 per cent contraction in April. With the outcome underwhelming compared to city economists’ expectations of 5.5 per cent growth, output remains 25 per cent down compared to February.”

July’s figures, due to be published this month, will give a better understanding of how quickly lost output can be regained as larger parts of the economy resumed activity, he concluded.

Image credit | iStock

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