Strong month for Infrastructure as award values exceed £1bn


The value of new contracts across construction reached £6bn in August, a monthly increase of 28.9%. This sunnier outlook provides further evidence that the construction industry continues to bounce back from its poor performance in the first quarter of the year.

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 residential sector continues to dominate and during August contract values were £2.2bn, accounting for 36.2% of contracts awarded. However, this is still some way behind the recent peak of March 2018 when £2.4bn contracts - including 25% more residential units - were awarded.

The infrastructure sector saw award values exceed the £1bn threshold for the first time in six months, with the current quarter being 6.8% ahead of 2017. Boosted by a number of large utilities contracts, infrastructure led the table of the biggest value contract awards across construction with five of the top ten projects for August being from this sector. The largest, the £1.8bn Triton Knoll 900MW Offshore Wind Farm in the Greater Wash Basin off the Lincolnshire coast, involves 288 turbines which are scheduled to produce 900 to 1,200 MW of electricity. The award of this project, plus Project Two at the Hornsea Onshore Substation in Lincolnshire, contributed significantly to the East Midlands leading the regional position with 68.4% of contracts awarded within the infrastructure sector, a 48.5% increase on August 2017.

Not only taking the leading position in contract awards across Infrastructure, the East Midlands led regionally across all sectors too, with a contract award value of 28.8% of the UK total. This was followed by the South East with a 14% share helped largely by the second largest contract award project for August which was the M23 J9-J10 Smart Motorway Gatwick Junctions in Redhill in Surrey at £158.4m.

Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: 

“It’s been a positive month - every sector within construction is up month on month and it is great to see award values boosted by some big-ticket Infrastructure projects. Of course, it remains to be seen whether the better numbers are temporary as the industry continues to play catch up with the lost output from the start of the year, but these figures should still provide much-needed confidence and are hopefully a sign of a more durable upturn in demand.”