Despite growing economic scepticism residential construction remains strong
The construction industry remained in a strong position during April with £6.1bn worth of contracts awarded, led by a 26% monthly spike in contract value from the residential sector, despite growing fears of a lacklustre second quarter for the UK economy.
According to the May edition of the Economic & Construction Market Review from industry analysts Barbour ABI, £2.1bn worth of projects were awarded in the residential sector across April, up from £1.4bn in January, demonstrating the continued strength of the sector. 67% of the value came from private housing, which is no surprise considering the positive fortunes that major housebuilders such as Barratt Homes, Persimmon and Taylor Wimpey are currently experiencing.
April 2016 residential figures
Infrastructure was also the big winner in April, as the contract value for the sector grew by 35% compared to April 2015. A strong pipeline of renewable energy projects including two major wind farms played a large role in boosting the figures, alongside a £500m nuclear decommissioning project in Sellafield, Cumbria.
Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said:
“Currently the UK has one of the lowest rates of new build housing worldwide in developed countries and with the various government incentive schemes in effect, it’s no surprise to see residential contracts continue to grow, boosting the construction industry as a whole.
“Even after a fairly subdued start to the year for construction output, we have not seen any drop off in construction contract award figures as of yet, despite the various economic headwinds facing the economy. As the referendum vote draws closer, it will be interesting to see what kind of impact, if any, it will have on the industry. Residential and infrastructure construction does not however seem to be slowing down any time soon with demand for housing, renewable energy and major infrastructure projects likely to continue throughout 2016.”
