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25/09/2019

Year-on-year decrease in value of construction contracts awarded

Words: Laura Edgar
Construction contract values / iStock-482489106

The value of construction contract awards in August was £4.9 billion, a decrease of 18.7 per cent compared with August 2018, according to the latest statistics.

Based on a three-month rolling average, this was also a 5.6 per cent decrease compared with July 2019.

Industry analyst Barbour ABI's Economic & Construction Market Review found that in the three-month period ending August 2019 contract awards were valued at £15.2 billion – 2 per cent more than in the previous quarter and 1.8 per cent higher than the same quarter a year earlier.

Barbour ABI noted that the residential sector continues to dominate contract awards, with a 42.5 per cent share in August. Infrastructure was next largest sector, with a 14 per cent share; education won 11.4 per cent; and the industrial sector accounted for 11.3 per cent of construction contract awards.

London topped the regions with a 17 per cent share of awards, with Yorkshire and Humber coming second with a 13.5 per cent share. The largest contract award in August was the £120 million development by the University of Leicester for a new academic building and 550-space multistorey car park on the Freeman’s Common site.

Tom Hall, chief economist at Barbour ABI and AMA Research, said: “The decline in project awards in August may be due to seasonality, and follows a strong June and July. However, it is concerning to see a 18.7 per cent decline compared to August 2018. The total value of contract awards was held up by the residential sector. While the Spending Review announced by the government this month suggests future increases in investment for sectors including infrastructure and medical and health, it will take a while for projects to commence.”

The report can be downloaded on the Barbour ABI website.

Image credit | iStock

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