Infrastructure tumbles, adding to construction industry woes
[edit] Infrastructure tumbles, adding to construction industry woes
Planning applications for infrastructure have plummeted 45% so far in Q2 and contract awards have fallen 32% according to the latest analysis from Barbour ABI.
Government-backed Infrastructure projects have previously provided some relief to the poor economic performance of the sector, as house builders and commercial contractors struggled.
Meanwhile, the smaller Industrial and healthcare sectors have also fallen 45% and 50% in the same period, following a positive start to the year.
Overall, contract awards in June confirmed the new lower trajectory with £5.3bn, the third month in a row of below-average levels. Activity fell by 21% compared to Q1, averaging £5.2bn per month compared to £6.5bn in Q1 and including a 10% fall in residential activity.
“We are seeing the positive impact of large Government investment in infrastructure projects after COVID begin to fade for the first time in our latest analysis.” Commented Barbour ABI chief economist Tom Hall.
“This will have knock-on effects for the industry which is already struggling with high interest rates and inflated construction costs, hitting new businesses which previously might have been shielded due to the nature of their portfolios.”
[edit] Early Planning stages
It was also another subdued month across earlier planning stages with a small recovery for planning approvals in June failing to save a very weak second quarter which saw a steep 20% fall. The residential sector suffered the lowest quarterly result since 2016.
For planning applications activity has now been very low for three months out of the last four. The main element that has changed over the last few months is the fall in the infrastructure sector, by 50% in some areas compared to 2022.
“June’s planning activity provided further evidence, if it was needed, of the likely slowdown in construction over the second half of the year driven by inflation, rising interest rates and lack of consumer confidence. Residential construction planning remains weak and continues to suggest house building will be greatly reduced over the year whilst new weaknesses are emerging elsewhere.”
Find out more at www.barbour-abi.com
--Barbour ABI 15:52, 18 Jul 2023 (BST)
[edit] Related articles on Designing Buildings
- 2023 Quarter 1 ends on a high with 7bn in construction contracts awarded in March
- 2023 Spring Budget summary and industry response.
- A second spring budget of 2023.
- Chancellor's 2022 Autumn statement industry response.
- Construction organisations and strategy.
- Corporate finance.
- Economic development and construction.
- Funding options for building developments.
- How does the state of the economy influence the construction industry?
- Investment.
- Microeconomics.
- Modular buildings.
- Prefabrication.
- Property development finance.
- Working capital.
Featured articles and news
What it is and how to use it.
Investors in People: CIOB achieves gold
Reflecting a commitment to employees and members.
Scratching beneath the surface; a guide to selection.
ECA 2024 Apprentice of the Year Award
Entries open for submission until May 31.
UK gov apprenticeship funding from April 2024
Brief summary the policy paper updated in March.
For the World Autism Awareness Month of April.
70+ experts appointed to public sector fire safety framework
The Fire Safety (FS2) Framework from LHC Procurement.
Project and programme management codes of practice
CIOB publications for built environment professionals.
The ECA Industry Awards 2024 now open !
Recognising the best in the electrotechnical industry.
Sustainable development concepts decade by decade.
The regenerative structural engineer
A call for design that will repair the natural world.
Buildings that mimic the restorative aspects found in nature.
CIAT publishes Principal Designer Competency Framework
For those considering applying for registration as a PD.
BSRIA Building Reg's guidance: The second staircase
An overview focusing on aspects which most affect the building services industry.
Design codes and pattern books
Harmonious proportions and golden sections.
Introducing or next Guest Editor Arun Baybars
Practising architect and design panel review member.