Construction value in 2015 reached £74bn thanks to the return of mega projects
The value of total construction contracts awarded in the UK reached £74bn in 2015, a year on year increase of 16%, thanks to an influx of mega projects being commissioned.
According to the latest Economic and Construction Market Review from Barbour ABI, the amount of projects commissioned in 2015 decreased year on year to under 12,000, however the total value was not negatively affected thanks to the increased number of mega projects. This resulted in the average construction project value increasing by 18% to £6.2m for the year.
An example of some of the large scale commisioned projects in 2015 include the £1.3bn Rampion offshore wind farm, the £1bn Thames Tideway Tunnel and a £330m extension of Walney offshore wind farm. Many of the large scale projects commissioned in 2015 were within the renewable energy sector, resulting in the infrastructre industry having a bumper year, increasing its total contract value by 47% to £18.9bn.
Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said:
“The return of the ‘higher value project’ has certainly been one of the biggest focal points for construction in 2015. Confidence seems to have returned for many of the larger companies within the industry, who must have felt that the time was right in 2015 to start commissioning mega projects that should provide a boost to the industry for years to come.
“It’s also clear that the number of large offshore wind farm projects has had a major effect on the infrastructure sector and its success last year, boosting construction in general with a major increase in contract value.
“However, the question remains as to whether the construction industry has the supply, principally skilled labour, to deliver on these contracts awarded in the timescales envisioned. Solving these supply side problems will be critical for constructions prospects in 2016 and beyond.”