Construction Contracts Awarded Soar in Value

THE VALUE OF CONSTRUCTION contracts awarded in January 2020 hit £5.5 billion according to research by Barbour ABI, up 18.5% on December 2019.

Contract values were also up 2.1% on January 2019, with the number of contracts almost doubling from December 2019 to January 2020, up 95.4% to 893.

For the three-month period ending January 2020, total construction contract awards were valued at £15.6 billion which is 7.1% higher than the previous quarter and is also 5.1% higher than the comparable quarter ending January 2019.

Sector by sector

The largest sector this month was infrastructure with attributable share of 42.7% of awards with the residential sector in second place attracting share of 25.5%.

The infrastructure sector accounted for the two largest contract awards this month with combined value of £3 billion.

Types of projects awarded contracts for January 2020

The largest contract award was the £2 billion Dogger Bank Creyke Beck 1.4GW Offshore Wind Farm. The second largest contract award was in London and was the £1 billion Silvertown Tunnel project for Transport for London to provide a new car crossing between Thamesmead and Beckton.

Regionally, 32.5% of contracts awarded were in London and 26.6% in Yorkshire & Humber. The other nations and regions which make up the remaining 40.9% share

Tom Hall Chief Economist at Barbour ABI

Tom Hall, Chief Economist at Barbour ABI and AMA Research said, “January’s strong contracts awards data suggests construction industry activity may be starting to respond after a clear general election result and the UK’s exit from the EU finally occurring, even if it is largely symbolic at this early stage.

“Whether the fog of uncertainty descends again as the upcoming UK-EU talks commence remains to be seen. Positive signs, such as the approval of HS2, indicate growth for the sector but at the moment it is too soon to tell whether January’s increase will convert into a sustained boom for the industry.”

The full report is here