Builders’ Conference ‘No cause for alarm pt 2’

The value of new construction contract awards recorded in August 2021 showed a fall against the previous month. But with tender activity still positive, Builders’ Conference CEO Neil Edwards believes this is merely a seasonal blip rather than a genuine cause for concern.

The confidence of the UK construction industry is a remarkably timid and fragile thing that is startled all too easily. So whisper it quietly. The new construction contract awards recorded in the month of August 2021 were down by more than £1.1 billion on the preceding month.

But before anyone is tempted to fashion a makeshift “the end is nigh” sign, Builders’ Conference CEO Neil Edwards says that this downturn is merely a temporary and seasonal glitch.

After more than 18 months of ceaseless work amidst the COVID-19 lockdown, the UK construction sector has apparently taken a well-deserved break. Fewer new contract awards were recorded – at least partly – because those charged with awarding or reporting them were enjoying a long overdue holiday.

While the top-level figure showed a change, falling to £4.68 billion, other aspects of the industry remain stubbornly constant. London accounted for around a third of all new contract awards reported in August 2021 while housing accounted for roughly 40 percent of all new contract award activity.

Amidst all this, two of the industry’s most consistent high performers took the top two positions on the BCLive league table. Morgan Sindall and Kier Group are engaged in a monthly battle to see which company will secure the highest number of new contract awards. Kier Group came out on top this month, landing an astonishing 34. But that wasn’t enough to stop Morgan Sindall topping the BCLive league table with a 15 contract haul valued at £521 million.

The most significant of these £350 million fit-out contract for Citibank at its Canada Square tower in London’s Canary Wharf. The landmark tower was purchased by Citigroup for £1.2 billion two years ago. The building is now to be redeveloped as part of “Project Saturn” that will include a major building services infrastructure replacement, façade works and an extensive refurbishment to the tower’s lifts.

Under normal circumstances, 34 new contract awards would have guaranteed the BCLive top spot. But Kier Group had to settle for second place and a combined £280 million set of new orders.

Key among these is the £45 million new build at Currie High School in Currie, Edinburgh. That project includes the construction of a new community high school together with a swimming pool and sports facilities.

Third position on the BCLive league table went to Berkeley Group which won a pair of new contract awards worth a combined £244 million. The largest of these is a £164 million contract for the construction of 584 new homes on a site at Woodberry Down in London’s Finsbury Park.

Galliford Try claimed fourth position on the BCLive league table, winning three new contracts worth a combined £178 million. The most notable of these is a £170 million refurbishment and repair contract that will convert a three mile stretch of the A303 between Sparkford and Ilchester into a dual carriageway. This contract is scheduled to be carried out in parallel to the disputed A303 Stonehenge Tunnel project and is expected to be complete by 2024.

Claiming fifth and sixth spot this month are two companies that do not generally grace the upper echelons of the BCLive league table: John Paul Construction; and Renaker Build respectively.

John Paul Construction picked up £159 million in new contract awards including a £116 million housing project at Sandyford Central in Dublin. House building also elevated Renaker Build to a new high, the £120 million creation of 390 new apartments across two towers at Water Street in Manchester clinching the number six spot.

Regionally, London – predictably – came out on top, contributing more than £1.54 billion to the monthly total. The usually reliable East and West Midlands (£72.5 and £158.7 million respectively) apparently paused for breath while the North West delivered an above-average performance with 38 new projects valued at a combined £509 million.

Scotland’s recovery looks to be back on track with a £311 million month while North Wales went in the opposite direction, recording no new contract award activity during the month.

With almost £1.9 billion in new contract awards, the housing sector once again led the way. But offices (£754 million) and education (£407 million) also enjoyed a positive month.

Despite the month-on-month fall, the August total was almost identical to the same month last year and remains well ahead of the long-established £4.0 billion monthly average. The level of tenders in the industry pipeline also remains positive.

In all likelihood, the figures for August merely reflect the industry taking a well-earned pause for breath. After a year (or more) in which it used its key worker status to carry the hopes of the UK economy upon its shoulders, no-one could begrudge the sector a deserved break.

Quick review of BCLive table for August 2021

  • 360 no companies were detailed as winning new contracts during August 2021
  • 454 no new construction orders were researched by Builders’ Conference all detailed on the UK’s only Live league table of construction contract awards BCLive
  • Morgan Sindall Group secured overall top spot with a two contracts worth £521.4 billion
  • Kier Group was the company with the most number of new construction orders in the month with 34no totaling £280 million

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SOURCE: Builders’ Conference PR

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