The latest construction figures released from Barbour ABI have shown record highs for the commercial and retail sector and new home contracts.
The figures, which cover the month of October, have shown that the value of contracts awarded within the commercial and retail sector have reached the highest levels for two years. Totalling more than £1.2Bn based on a three month rolling average, these figures have increased 15.9% on September and a huge 74.7% since October 2013.
The report also shows that contracts awarded within the sector accounted for 16% of the total value of contracts UK-wide in October, with more than a quarter of these awarded in London.
Michael Dall, lead economist at Barbour ABI, commented: “It’s no surprise that London was the main location of activity in the sector this month with 25.3% of the value of all contracts awarded, largely due to the £80M office development on 4 Kingdom Street, Paddington, the mixed use development at North Wharf Gardens, also in Paddington, worth £65M and the Charter Place complex in Watford valued at £25M.”
The new home contracts awarded during October were at the highest level since 2008 and increased for the sixth consecutive month. The residential sector is performing well and the sector’s construction figures accounted for a third of the total value of contracts awarded.
The value of contracts had dipped slightly with a 0.6% drop from September and a drop of 6.2% compared to October 2013. Experts believe this may be an indication that the recent boom in house building is beginning to spread to other parts of the UK, as opposed to a concentration in London where values tend to be higher.
Michael Dall, lead economist at Barbour ABI, commented: “The fact that the number of units is on the increase but values aren’t shouldn’t prove too concerning for the industry, as this is more than likely due to a wider geographic spread of house building contracts to areas such as the South West (13.9%) and South East (13.2%).
“After its recent sluggish performance, it’s also positive to see the infrastructure sector featuring prominently this month with 22% of the total value of all projects. With the sector showing growth in the latest ONS Construction Output figures, perhaps this is evidence of projects in the pipeline beginning to translate into activity on the ground.”
New contracts awarded in all sectors were valued at £6M, a 5.9% increase from September and a 6.1% increase on the same month last year, an indication of further fourth quarter growth.
Other highlights from the construction figures announced include:
• The number of construction projects within the UK in October was up 5% from September and 1.9% higher than October 2013
• The majority of contracts awarded in October by value were in London, with 29 per cent of the UK total
• Wales accounted for nearly half of the total value of hotel, leisure and sport construction contracts awarded due to the contract awards of major projects including the £315M Circuit of Wales motor track and the £6.2M STAR Community Hub in Cardiff.
• The figures were released by Barbour ABI, a chosen provider of construction data to the Office of National Statistics and the Government