Construction contract awards reach 7.1bn in February, their highest level in seven months
- Construction spending at highest levels in months
- Infrastructure is a star performer, reaching highest spending level in over four years
- Commercial has a stellar month as mega projects are confirmed
- Businesses remain coy on new planning applications as they await better economic news
February saw construction contract awards reaching £7.1bn, their highest level in seven months, according to Barbour ABI’s latest data. An 11% increase in contract awards in February appeared to confirm the increased spending trend reported by Barbour in January, as industry spenders continued to flex their muscles.
Infrastructure was the star performer with spending increasing by 108% on January. Contracts for two road tunnels under the Thames for the Lower Thames Crossing in Kent were agreed with a value of £1.3bn.
Better prospects are also in store for the commercial sector as the significant headwinds faced since the onset of the global pandemic begin to ease.
A 152% increase in spending included the £330m refurbishment of Citi Group’s iconic 42-storey tower at Canary Wharf finally got into contract in February, adding to the already sizeable pipeline of extensive refurbishments in the commercial sector.
Redevelopment of ITV’s former recording studio on London’s Southbank gained planning consent after a lengthy delay and Stanhope submitted revised plans for what will become the City of London’s tallest tower – 1 Undershaft – in January.
Barbour ABI consultant economist, Kelly Forrest commented:
“Generally, commercial project viability remains tight, but progress on these mega projects is nevertheless great news for the industry. Along with infrastructure, these sectors are providing an antidote to continued malaise in residential construction, which is still being weighed on by higher mortgage rates and weak consumer confidence.”
First look at 2024 planning applications
March provided a first look at planning applications in 2024. At £7.1bn in January, applications were 22% lower than a year ago with residential, Industrial and infrastructure all seeing sharp drop offs.
Forrest continued: “Notably, we are seeing clear divergence emerging between spending and new planning applications. Decision makers are eager to get existing and approved projects off the ground, but they don’t yet have the confidence to look ahead to new work. Viability is a big factor constraining developers’ appetite to present schemes to planners, but this should improve when financing costs start to reduce.”
--Barbour ABI 12:28, 18 Mar 2024 (BST)
[edit] Related articles on Designing Buildings
- April turn for the worse, for construction, as market seesawing continues
- Best value procurement.
- Bid evaluation.
- Contract award.
- Contracts under seal v under hand.
- Construction contract.
- Construction industry revs engines in January.
- Contract negotiation.
- Education and Health applications shine in subdued construction October market.
- Infrastructure tumbles, adding to construction industry woes.
- Letter of award.
- Most Economically Advantageous Tender (MEAT).
- New energy rules, a threat to towns and cities across UK
- Procurement route.
- Subdued planning environment figures provide scant hope for house-building targets
- Tender processes.
- UK Construction saw an £11.1bn fall in spending in 2023
- New energy rules, a threat to towns and cities across UK
- Infrastructure tumbles, adding to construction industry woes
- Construction industry revs engines in January
Featured articles and news
CIOB and CORBON combine forces
To elevate professional standards in Nigeria’s construction industry.
Amendment to the GB Energy Bill welcomed by ECA
Move prevents nationally-owned energy company from investing in solar panels produced by modern slavery.
Gregor Harvie argues that AI is state-sanctioned theft of IP.
Heat pumps, vehicle chargers and heating appliances must be sold with smart functionality.
Experimental AI housing target help for councils
Experimental AI could help councils meet housing targets by digitising records.
New-style degrees set for reformed ARB accreditation
Following the ARB Tomorrow's Architects competency outcomes for Architects.
BSRIA Occupant Wellbeing survey BOW
Occupant satisfaction and wellbeing tool inc. physical environment, indoor facilities, functionality and accessibility.
Preserving, waterproofing and decorating buildings.
Many resources for visitors aswell as new features for members.
Using technology to empower communities
The Community data platform; capturing the DNA of a place and fostering participation, for better design.
Heat pump and wind turbine sound calculations for PDRs
MCS publish updated sound calculation standards for permitted development installations.
Homes England creates largest housing-led site in the North
Successful, 34 hectare land acquisition with the residential allocation now completed.
Scottish apprenticeship training proposals
General support although better accountability and transparency is sought.
The history of building regulations
A story of belated action in response to crisis.
Moisture, fire safety and emerging trends in living walls
How wet is your wall?
Current policy explained and newly published consultation by the UK and Welsh Governments.
British architecture 1919–39. Book review.
Conservation of listed prefabs in Moseley.
Energy industry calls for urgent reform.