Industrial construction contracts increase by 26.4%

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industrial contracts, barbour abi, warehousing
© Hans Slegers

Analysis indicates that in the three months to May the total value of industrial contracts awards was £1.8bn, an increase of 26.4% in the last quarter

The value of all industrial construction contract awards in May 2019 was £614m based on a three-month rolling average. The warehousing and storage sector accounted for the largest share of industrial contracts awards with a 51.5% share.

The North West had the largest share of industrial contract awards in May at 20.4%. The two largest contracts awards in this area were a project for four industrial units at Haydock Lane Industrial Estate valued at £27m and a £20m logistics facility with warehousing and storage at Hillhouse Business Park in Blackburn.

Figure 1.

The North West was closely followed by the West Midlands in a 18.5% share and in third place was the East Midlands with 15.8%.

The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI highlights levels of construction contract values awarded across Great Britain. The overall outlook for May saw a total value of contract awards across all sectors at £5.0bn which is a decrease of 4.8% in contracts from April 2019 but 10.4% higher than May 2018.

The residential sector again held the largest share of contract awards in May with an attributable share of 42.3%. Infrastructure was the second largest sector this month with awards share of 17.0%, this was followed by the industrial sector with 11.4% overall.

The largest residential contract award was the Clockhouse and Access House development at Bow in London which was valued at £130m and was awarded to Henry Construction Limited. The largest contract award in the infrastructure sector was the new prison development at Wellingborough in Northamptonshire, which was awarded to Kier Construction Major Projects.

Figure 2.

Commenting on the figures, Tom Hall, chief economist at Barbour ABI said, “Overall the UK has seen a decline in contract awards in May, compared to April.

“However, we continue to see increased activity in Q2 of 2019 compared to Q1. The residential sector continues to dominate overall activity; however, it is interesting to see what’s happening in the other sectors.

“We are experiencing a continued increase into Q2 2019 in contract awards for the warehousing and storage sector, especially in more central areas of the UK perhaps for its transportation links.”

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