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UK construction contract awards fell 13.1% in 2018

Publication Date: 25 Jan 2019 - By ReachX Team By ReachX Team
Actionable
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Equity Fundamental Macro Multi Asset UK Construction

The headline valuation of construction contracts awarded in the UK declined on an annualised basis, according to an industry report. 

In its annual assessment of the British construction market, Barbour ABI said the value of all contracts awarded in the UK in 2018 came in at £61.6bn, which constitutes a decrease of 13.1% on the previous year.

The industry analysis firm also said the number of contracts awarded continued on a downward trend with 10,352 awarded during 2018; a decline of 8.2% on 2017 and 16.8% down from the 2014 peak of 12,440. 

However, the planning pipeline remains positive with infrastructure particularly strong (113% increase on 2017).

Barbour ABI added that the British residential sector had the highest proportion of contract awards by value in 2018 with 37% share, which is an increase of 2% on 2017 (See Figure 1.1.)

Infrastructure was the second largest sector for contract awards in 2018 with 21% share, a decrease of 9% on 2017 (See Figure 1.1). The analysis firm expects infrastructure will remain strong in 2019 and beyond due to the commencement of High Speed 2 (HS2) projects in the rail sector with further investment in electricity distribution and generation also forecast to continue.

In terms of a regional break-up of compiled data, Barbour ABI said London had the highest share of contracts awarded in 2018 with a 19.4% share, down slightly from 20% in 2017. 

The South East had the second highest share of contracts awarded by value in 2018 with 12.1% share, which is 0.1% higher than for 2017. In third position, the North West accounted for 11.8% of contract awards in 2018 which is a 0.2% decrease on 2017. (See Figure 1.2.)

Further reading: 

UK construction dodged Carillion bullet but underlying problems persist, 21 Jan 2019

Disclosure:

I have no positions in any of the securities referenced in the contribution

I do not use any non-public, material information in this contribution

To the best of my knowledge, the views expressed in this contribution comply with UK law

I agree with the terms and conditions of ReachX

This contribution is for informational purpose and does not constitute investment advice nor is it an offer to sell or buy, nor is it a recommendation for any security.

ReachX Team

 

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