Construction industry starts the year on a high with housebuilding dominating


A new analysis from Barbour ABI has revealed the construction industry began 2017 on a good footing as the rate of housebuilding continues to climb

Leading provider of construction intelligence Barbour ABI has revealed that housebuilding dominated activity since the beginning of the year.

A new analysis showed the start of the year got off to a good start. January saw the value of new building contracts increase to £6bn, with over a quarter of the contract value originating from London construction.

Barbour ABI said this figure was boosted by the One Nine Elms project, which is being undertaken in Vauxhall. This development was the most valuable in this month, hitting £900m.

Mixed construction industry

Housebuilding contracts saw a massive surge, growing by 83 per cent year-on-year to reach £2.7bn. Some 91 per cent of the contracts were for the private housing sector, a figure that is up from only two-thirds a year ago.

Looking beyond the housing market, Barbour ABI’s analysis revealed a bleaker outlook. Both the commercial and retail sector took a hit, seeing a decline of 40 per cent year-on-year last month.

Infrastructure also suffered, despite the number of major projects in the pipeline. This sector reached the lowest point in a year as contract values fell for the eleventh consecutive month.

December’s figures from the government saw construction output was slowing, hitting 0.6 per cent year-on-year. However, mortgage approvals continued to pick up following the low seen after the EU referendum vote last year. This reached the highest level since March.

The future looks bright

However, Barbour ABI revealed a healthy pipeline for future construction work. In fact, there is some £5.8bn worth of contracts nearing completion.

Michael Dall, lead economist at Barbour ABI, said: “Whilst the housebuilding sector is performing admirably, we expect to see its growth continue to flourish across 2017.”

“On the positive side, the number of projects awarded in January jumped by 50 per cent compared with December and 25 per cent when looking at January last year.

“These figures are encouraging and would suggest that work is most certainly on the way.”


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