The construction sector has had a slow start to 2016 with contract values falling 9% to £5.3bn in January.
The latest Economic & Construction Market Review from Barbour ABI said the residential sector led the construction industry with a total contract value of £1.4bn during the month.
In other sectors within the industry, the appetite for new offices continued to attract investment and dominated the commercial and retail sector with 80% of the total contract value which was worth just under £800m.
Michael Dall, Lead Economist at Barbour ABI, said even though January was slow for the construction industry in terms of contract value, the pipeline was relatively strong.
“I’m expecting to see a flurry of £100m plus projects to get agreed over the coming months,” said Michael.
“I see private housing and infrastructure as the bright lights of the sector for 2016.”
However, Michael warned that the industry needed to be wary of a growing trend of major contractors not being able to agree a final price with clients.
“This is largely due to cost inflation and skills shortages,” added Michael.
“It is an indication of the difficulties the industry could face in the future as demand seems to be holding strong but increasing costs could potentially affect the sector’s ability to deliver.”
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