Spending on
new construction orders reached nearly 8.4bn in January in an upbeat start to
the year for construction – a 69% increase on December.
The
analysis follows analysis last month from Barbour ABI that contract awards were
up 15% up in 2024.
The figures provide a silver lining after the S&P Global
purchasing managers’ index (PMI) showed a fall in on-the-ground construction
output in January.
The residential sector bounced back from a disappointing finish to
2024 to see a January total of just under £2.5bn, up £900million on previous
month. A £180million development at Devonshire Garden in Cambridge led the
surge with Morgan Sindall set to carry out the works.
Meanwhile infrastructure awards were up 7% on previous month and
13% on same month last year. The renewable energy sector played a role
including contracts awarded at Immingham Green Energy Terminal at a cost of
£170m.
“A great start to the year with contract awards augurs well for
2025,” said Barbour ABI Head of Business and Client Analytics, Ed Griffiths.
“This suggests that the downturn highlighted in the recent PMI index could be
short-lived, with new work on the horizon.
“A further fall in interest rates announced this week will also
add to increased confidence from investors, although the news is tempered by a
fall in projected UK GDP. Although growth is expected for 2025 it will be at
the lower end in the built environment.”
Meanwhile the latest planning application figures remained flat
with a 2% increase between November and December 2024. Although there was
little movement overall, individual sectors did see significant rise and falls.
December was a strong month for the infrastructure sector with a
35% increase in the value of applications. The top application was the 840MW
Botley West Solar Project. The North East saw a strong recovery from a weak
November rising to £540m. The largest application was a 1000MW Battery Storage
Project.
“Our recent industry performance review highlighted how
infrastructure sustained the sector in 2024. Planning applications at year-end
suggest this trend could continue into 2025, with green energy at the
forefront,” said Griffiths.
“However, uncertainty remains high, and the industry will be
hoping that falling interest rates finally lead to an increase in project
submissions.”
