Construction woes continue as June figures show no improvement

, Construction News, News

The value of new construction contracts in June reached £4.4 billion, a decrease of three per cent compared to May
and the lowest performing month across construction for more than five years. Housebuilding, the industry’s biggest
sector, fell to its lowest point in 2018 with £1.7 billion in contracts awarded and also declined for the fourth month in a
row.

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 largest project by value across the month was the
£115 million Luton Airport – Light Rail Link project (see figure 1.1). This project was followed closely by two major
housebuilding developments; Waterhouse Gardens in Maidstone and Upper Warren housing development in
Hartlepool, with both projects each worth £100 million.

Across the rest of construction, infrastructure saw a slight increase in contract value, reaching £740 million but still more
than four times lower than the heights reached at the end of 2017. Apart from hotel, leisure & sport developments
which also saw a very slight increase, the rest of the industry sectors witnessed monthly decreases in June, as the lack
of large value projects has now become more noticeable.

Regionally, the South East was the region with the largest share of contract awards value in June with 14.7 per cent of
the total, which included two of the top five biggest projects across the month. The region was then followed by the
North West with 13.1 per cent and London with 12.7%.

Commenting on the figures, Michael Dall, Lead Economist at Barbour ABI, said: “Over the first six months of 2018 we
have seen a lack of ‘mega projects’. They are usually valued into the hundreds of millions and we have become
accustomed to seeing them being awarded in previous years. Without these projects, particularly from the
infrastructure sector, the industry cannot replicate strong figures each month until this trend is reversed.”














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