Infrastructure contract awards decrease by 50% from 2017-2019

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Infrastructure contract awards decreased by 10.3% in 2019, as the sector experiences its second consecutive year of decline

The total value of infrastructure contract awards in 2019 was £10.4bn which is a decrease of 10.3% on 2018.

This is the second consecutive year of decline, with the value of infrastructure awards having decreased by 50% between 2017 and 2019. 2015-2017 figures were boosted considerably by several very large infrastructure contracts such as the enabling works for HS2.

The latest insight from Barbour ABI, construction industry analysts, reveals levels of infrastructure contract values awarded across Great Britain.

Regional infrastructure analysis

Regional analysis indicates that infrastructure contract awards in the North West accounted for the largest share of infrastructure awards in 2019 at 24.5%, which is an increase of 17.2% on 2018. The East of England was the second largest region accounting for 11.8% of awards which has remained at the same level as 2018.

Positive outlook

The outlook for infrastructure looks positive with a strong pipeline, according to analysis. Projects such as HS2, the Transpennine route upgrade and Hinckley Point C will contribute to growth in the sector.

However, the feasibility of this funding is currently under review.

Commenting on the figures, Tom Hall, chief economist at Barbour ABI and AMA Research, said: “While the pipeline may appear positive, the risk of major projects in the planning system being delayed, descoped or cancelled remains.

“This week Boris Johnson and senior ministers will meet to decide the fate of HS2. The sector’s short-term momentum remains dependent on previously promised projects, while the Chancellor’s budget in March will give an indication of travel over the medium term.”

Fate of HS2

According to reports by the Financial Times, chancellor Sajid Javid is expected to throw his support behind HS2 ahead of a key meeting with Boris Johnson later.

He is anticipated to tell the PM he supports the London to Birmingham phase of the rail link after studying Treasury analysis of its influence.

Phase 1 of HS2 between London and Birmingham is scheduled to open at the end of 2026, with the second phase to Leeds and Manchester due for conclusion by 2032-33.

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