Construction still on the backfoot after the General Election

According to the recent publication of the Glenigan Construction Review for the month of January 2020, the British construction sector is was still enduring the ‘aftershock’ of the political uncertainty which tainted the end of the previous decade, namely the December General Election.

To be more specific, the reluctance of employers, contractors, and organisations to make any definite decisions in light of the December General Election and the unanswered questions surrounding Brexit meant that the value of construction projects starting on site in the three months building up to January declined by a figure of 33 per cent against the previous year.

What this meant was that the average value of all construction project starts over the course of these three months measured at a value of just £4.586Bn per month, but, with the aforementioned General Election providing some clarity on the country’s political future, the value of construction project starts gaining approval significantly increased by a proportion of 20 per cent.

Going into more detail, the worst performing subsector within the construction industry over this three month period was actually that of major projects, declining to a total average value of £942M per month which, in turn, is 63 per cent lower than the same figure from the previous year.

Comparatively, the underlying value of projects over the three months up to January 2020, that were not considered major (in essence they were valued at less than £100M), likewise fell by a proportion of 11 per cent when placed next to the preceding three months and was down by a figure of 15 per cent when compared to the same three month duration one year before.

Referring back to the aforesaid spike in construction project approvals, the best performing subsector by way of project value was, ironically, that of major projects, where the average monthly value of all approved projects over the three months building up to January 2020 increased by a massive proportion of 51 per cent when compared with the same figure from the previous year.

As a result of this incline in approvals, against the fall in projects starting on site, it can quite safely be concluded that authorities within the construction industry were hesitant to begin construction projects on site, in light of the stagnant political situation, but in the immediate aftermath of the election received an onslaught of project approvals to jump start the sector after the hindrance.

The top five performing contractor companies, according to Glenigan’s market analysis, were occupied by the usual suspects in January 2020, with John Sisk occupying the top spot after accumulating a total income of £151M from just one contract, VolkerWessels claimed second with £150M spread over four projects, and Morgan Sindall occupied third place after gaining the same income as VolkerWessels but spread over an astronomical 40 different projects.

Furthermore, it was the contractor company Wilmott Dixon which came in fourth place with £133M gained across 13 different projects whereas fifth place was anointed to McLaren who gained £130M from just the one project.

Interestingly, however, the top five construction industry client for January 2020, as identified by Glenigan, is dominated mostly by private and commercial companies as opposed to public sector and government organisations, which typically create the most work for the construction sector.

In going off of these figures, it can be seen that the Department of Health occupied the top spot as the highest valued client of the British construction sector, followed by the companies Quintain, the Peabody Trust, the London Borough of Waltham Forest, and Aviva, which claimed second, third, fourth, and fifth place respectively.

If you would like to read more articles like this then please click here.

The post Construction still on the backfoot after the General Election appeared first on UK Construction Online.