In what is traditionally a slow summer month for construction,
August turned out to provide a welcoming boost for the construction industry,
as the value of new contracts awarded reached £5.8 billion based on a three
month moving average, resulting in a 7 per cent increase on the month and the
highest recorded figure since March 2017.
The
latest edition of the Economic & Construction Market Review from industry
analysts Barbour ABI, highlights the levels of construction contract values
awarded in August across all regions of Great Britain.
As it
has done since late last year, residential construction performed strongly and
accounted for £2.7 billion on the month – the highest recorded figure since
Barbour ABI began tracking the series.
The high
level of residential work greatly helped the number of construction projects
commissioned in August, seeing a monthly increase of 20 per cent and up 15 per
cent from August 2016.
Across the other construction sectors, commercial and retail
building reached £785 million in August, a monthly increase of 47%. The two
largest projects of the month also came from this sector - 1 Park Place office
development in Canary Wharf and the Intu Leisure Lakeside development in Essex,
estimated to be worth £200 million and £180 million respectively.
Infrastructure continued to struggle in August, with its total value at £696
million, a 44 per cent decrease on July and the fifth month in a row the sector
has decreased in construction contract value.
Regionally, London led all regions with 20 per cent of the UK’s
construction contract value in August. The capital accounted for the highest
valued project in August, the aforementioned £200 million 1 Park Place and the
Wembley Park residential development valued at £150 million. The North West
region followed London by value with 14 per cent of the total thanks greatly to
an £80 million development of Frontier Business Park in Blackburn.
Commenting on the figures, Michael Dall, Lead Economist at Barbour
ABI, said: “The construction sector can once again be thankful for the strong
showing of the residential sector, which provided £1.8 billion more than any
other sector in August, along with an increase of 55 per cent compared with
August 2016.”
“It is encouraging to see the number of projects increasing
steadily, particularly the larger projects from the commercial and retail
sector. However a lack of investment in infrastructure across August and for
the most part of 2017 is not encouraging, as we haven’t seen many major
projects come to fruition, especially after it was highlighted as a Government
priority earlier in the year.”
