Housebuilding continues to prop up construction sector


The value of new construction contracts in October hit £5.4bn, a 3.8% decrease compared to September, as housebuilding continues to prop up the sector with £2bn worth of contract value

The latest instalment of the Economic & Construction Market Review from industry analysts Barbour ABI highlights levels of construction contract values awarded across Great Britain.

The largest project in October was the £350m Keadby 2 Power Station, over three times the value of the second largest project on the month. With three of the top five largest projects in October based in London, this pushed the capital to account for the largest share of contracts awarded within the month, with a total of 17.2%, followed by the North West and Yorkshire & Humberside with 16.6 and 16.1% respectively.

Across the construction sector in October, medical and health projects reached £250m, its best month statistically for more than two years and a 230% increase on September. 91% of these projects were for public hospitals, such as the £90m contract awarded to Laing O’Rourke to finish the Royal Liverpool Hospital redevelopment after the collapse of Carillion.

Infrastructure saw an increase in contract value by 6.9% taking its monthly total to £1.3bn. However commercial & retail, hotel, leisure & sport, industrial and education construction sectors all experience decreases across the month.

Commenting on the figures, Michael Dall, Lead Economist at Barbour ABI, said: “There is no doubt that the strength of housebuilding is substantially helping improve the overall figures for the construction industry.

“With a shortage of homes across Great Britain and an influx of buyers helped by schemes such as help-to-buy has propelled the sector and kept developers busy to keep up increasing expectations to build more homes.

“Nevertheless, as Brexit continues to be discussed and negotiated, the lack of clarity on the matter for the remaining sectors seems to have influenced the total amount and value of contracts.”


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