Construction contract values plummet

The value of new construction contracts commissioned decreased by 16% during April compared with March, according to the latest research.

The Economic & Construction Market Review by Barbour ABI has revealed that £5.4bn of construction contracts were commissioned in April, lower than any month across all of 2016. 

Decreases in values occurred across every major sector within the industry, except for infrastructure. 

Residential construction saw a 30% decrease in April to £1.7bn after a six-month period of more than £2bn worth of contracts consistently being achieved each month. 

“It is possible that the timing of Easter this year halted activity in April, but this fall is larger than in other years, meaning other factors may be at play,” said Michael Dall, lead economist at Barbour ABI.

“As the residential sector failed to continue its strong performance in recent months, it only highlights the need for other sectors to pick up the slack, as a strong construction industry cannot rely on one sector to perform each month.”

After a poor year for the medical and health construction sector during 2016, April 2017 saw the sector only generate £84m worth of construction contracts.

“Although a comparatively small sector, it was interesting that the value of contracts in the medical and healthcare sector fell to a five-year low in April,” Michael added.

“A sector that is largely dependent on capital investment from the government, these figures will ramp up the pressure on all political parties to respond to calls for additional capital spending in the NHS.”

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