Construction projects increased by 20% in August as housebuilding thrives
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 £5.8bn based on a three month moving average, resulting in a 7% 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 £2.7bn 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% and up 15% from August 2016.
Across the other construction sectors, commercial and retail building reached £785m 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 £200m and £180m respectively. Infrastructure continued to struggle in August, with its total value at £696m, a 44% 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% of the UK’s construction contract value in August. The capital accounted for the highest valued project in August, the aforementioned £200m 1 Park Place and the Wembley Park residential development valued at £150m. The North West region followed London by value with 14% of the total thanks greatly to an £80m 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 £1.8bn more than any other sector in August, along with an increase of 55% 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.”