£5.5Bn of contracts awarded in April according to Barbour ABI

This is more than April 2014 and the industry outlook is positive.

Barbour ABI has released figures that show the value of projects awarded in the construction industry last month was £5.5Bn. 

These figures are from Barbour ABI’s Economic & Construction Market Review which is put together to provide an insight into the construction industry throughout the UK. 

Data is compiled by by using records that Barbour ABI have of every planning application in the UK, while information on new construction orders from the Office for National Statistics is also used. 

The £5.5Bn in awarded contracts in April is the biggest figure found from the research, though this is a drop of almost 10% from those awarded last month. 

In addition, commercial and retail construction projects awarded were down by 12.9% while health and education projects contributed to the fall. 

Despite these figures though, there is much cause for optimism. For a start, the figure of £5.5Bn figure is much higher than this time last year, with an 11% rise. 

Secondly, private housing has continued to perform and accounts for 67% of new contracts awarded. 

While the health and education projects have not helped the figures, the industry can be safe in the knowledge that projects will be awarded in these areas and will provide potentially huge growths because of the National Infrastructure Plan which has committed to investment in these areas. 

Significantly the monthly decrease in April coincides with a period of uncertainty caused by the fact that it is the end of the financial year, and because it was so close to the General Election, which was expected to be one of the most closely contested elections for generations.

Michael Dall, lead economist at Barbour ABI, said these are reasons for the decrease but he also believes that the industry and look forward to “sunny days on the horizon.”

He said: “The decline observed in April this year is arguably symptomatic of the perfect storm that pre-election uncertainty, financial year end and typical monthly volatility have created. 

“Despite this apparent cloud over construction, demand within housing coupled with scheduled works across the public sector suggest there are in fact many sunny days on the horizon. 

“Improved confidence and accurate forecast spend as a result of the newly formed Government and pending July Budget should help reinvigorate the construction sector for a stronger performance later in the year provided these pending peaks are prepared for and harnessed.”

Breaking down the contracts awarded, the majority were in London (21%), with the south east and Scotland the next best performing areas. 

There is a lot to be encouraged about when the size of some projects awarded are taken into account. These include a phase of a residential development in Wandsworth in the Riverside quarter, costing £69M, while the Isle of Sheppey Distribution Centre for Aldi is a £90M project. 

Marischal Square in Aberdeen accounts for £107M of contracts awarded, while the Hawley Wharf project in Camden costs £115M. 

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