Absence of major projects slows construction in January


After an unpredictable 2017 for construction, 2018 hasn’t begun much stronger for the industry in January, with the value of new contracts awarded at £5.4bn, 10.6% lower than the same time last year, as a lack of major projects hits growth prospects

The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI, reveals levels of construction contract values awarded in 2017 across Great Britain. Residential housing and infrastructure both dominated the construction sector across January, with contract values at £1.9bn and £1.7bn respectively, which combined, is more than 65% of the total value of construction in January. The largest project in January was the £800m Spire London Hertsmere House development at West India Quay in London, more than four times larger than the next biggest development.

Eight of the largest ten projects in January came from the residential housing or infrastructure sector, albeit smaller in value than the ‘big ticket’ projects regularly seen. These included the £200m Wednesbury to Brierley Hill Metro Extension and the £100m Waste Water Treatment Works in Blackburn.

Across the industry, education and hotel, leisure & sport sectors both saw monthly decreases in value in January, which could be seen as particularly concerning due to December being a traditionally quiet month. The remaining sectors of residential housing, infrastructure, commercial & retail, industrial and medical & health all saw upsurges on the previous month but overall below the levels of January 2017.

Regionally, it was London that led all areas with contract award value at 32% of the UK total, largely attributed to the aforementioned £800m Spire London Hertsmere House development at West India Quay in London. This was followed by the North West with 13% of contract awards and Scotland with an 11% share.

construction in JanuaryCommenting on the figures, Michael Dall, Lead Economist at Barbour ABI, said: “The recent collapse of Carillion has not done much for confidence in the sector, which is already facing a number of headwinds. Mainly due to a lack of major projects, construction has been held back in January. Nevertheless, encouraging figures from the residential housing and infrastructure sector is pleasing, but other sectors now need to help pick up the slack, such as hotel, leisure & sport which produced its lowest figures in January since October 2015.”


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