A strong quarter from the infrastructure sector has boosted the number of new construction orders…
Infrastructure, which formed a major part of the government’s Spending Review and plans for the future, contributed some £4.5bn to the economy—an increase of 42 per cent year on year.
Figures from Barbour ABI, the chosen provider of construction new orders, estimated the value of new orders during Q3 hit £16.1bn.
The data revealed that four out of the five largest projects within the construction sector were infrastructure-based. Among these projects were the £1bn Thames Tideway tunnel project and the £600m Race Bank offshore wind farm.
Barbour ABI said there was evidence of a geographical spread across all infrastructure projects in the third quarter, with schemes located in Northumberland, Cheshire, and Lincolnshire. This is different to other parts of the construction sector, where major projects are often mainly located in the capital.
Michael Dall, lead economist at Barbour ABI, said: “The third quarter in construction saw an increase in new order values despite the wider slowdown in growth across the UK economy.
“In particular, the infrastructure sector experienced strong gains in the third quarter, with major projects such as the Thames Tideway tunnel reaching the contract stage.
“These are the types of major projects that have been scarce in recent years so they provide a welcome fillip to the sector and, after further funding was confirmed in the Comprehensive Spending Review, future prospects for infrastructure have improved significantly.
“In addition, the latest ONS output figures for October, which show growth of 0.2% compared with September, suggest a potentially stronger finish to the end of the year after the summer slowdown.
“Overall, the levels of appetite for investment across construction remain strong at the contract stage. The problems lie more on the supply side at present, with skills shortages, in particular, a major challenge in moving projects from the conceptual to the delivery phase.”
