Construction contract

New construction contract orders reach £71bn in 2017



The value of new construction contract orders reached £71bn in 2017, with £45.3bn of the total attributed to infrastructure and residential housing, according to new research.

The latest edition of the ‘Economic & Construction Market Review’ from industry analysts Barbour ABI revealed a slight increase on 2016.

The largest sector last year was residential housing, with £24.6bn worth of contracts.

Infrastructure was the next biggest sector with £20.7bn.

Hotel, leisure and sport construction experienced an increase of 28.1% on 2016 to £6.1bn.

However, construction within the commercial and retail, medical and health, education and industrial sectors all decreased in value for the third year in a row.

London was the region with the largest value of contracts in 2017 – 20% of the UK total – with an overall value of around £14bn.

Michael Dall, lead economist at Barbour ABI, said: “Projects from the residential housing and infrastructure sectors provided solid foundations for the industry in 2017, as the need for more housing alongside the commissioning of HS2 boosted the total value of construction contracts on the year.”

Michael added that the Construction Products Association expects zero growth in 2018 but believes the construction industry will recover in 2019 with growth of 2% predicted.

“The reason for the predicted return to growth in 2019 is because the deal with the European Union will be agreed, or at least the details will be clearer.

“This will create more certainty in sectors such as commercial, which have been performing poorly in recent months.

Clearly the recent collapse of Carillion has potentially far-reaching consequences for the construction industry, but this is an evolving situation and the impact is hard to quantify at present.”

 


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