Construction finishes year strongly says Builders’ Conference

If you can keep your head while all about you people are losing theirs, chances are you work in construction, an industry that continues to roll up its sleeves and deliver astonishing new contract awards. Builders’ Conference CEO Neil Edwards looks over the period September to November 2021.

SEPTEMBER 2021

The industry may have paused for breath in August when it recorded £4.71 billion in new contract awards, but it was business as usual in September with an impressive £7.42 billion total. 

The monthly total did however contain a £2.2 billion single contract anomaly – won by the Align joint venture comprising Bouygues, VolkerFitzpatrick and Sir Robert McAlpine – to build the Colne Valley Viaduct that will carry the HS2 line across a series of lakes and waterways on the north west outskirts of London.

BAM picked up four new contract awards worth a combined total of £481 million, the largest of these being a £300 million road new build to ease congestion on the A27 at Crossbush Junction near Arundel in Sussex. Morgan Sindall secured 11 new contract awards worth a combined £374 million, including a £290 million new build project won by the group’s Lovell Partnership division to construct 766 new dwellings in Woolwich, London.

Bouygues scored with a pair of projects valued at a combined £347 million, including the £250 million new build of homes at Ebury Bridge Estate, Westminster. McLaren Construction secured the £200 million new build contract of a 37,000m2 factory for the Aston Martin Cognizant Formula 1 team. Kier Group won the most projects – their 14 contracts totalling £104.6 million.

Housing was the winning sector once again, contributing 165 new contracts worth a combined £2.475 billion. Offices (£560 million), roads (£499 million) and entertainment and leisure (£410 million) also enjoyed a positive month. 

OCTOBER 2021

October usually marks a gradual downturn in contract awards, so a small month-on-month decline was unsurprising and inevitable. A total of £4.74 billion was above the established £4.0 billion benchmark but down on September’s total.

Berkeley Group secured top slot, winning the £380 million contract to construction dwellings at Malt Street in Bermondsey, London. J Reddington secured a pair of new build housing projects: a £160 million mixed use development including 545 flats, a library and gym in Manchester; and a £150 million contract for 506 dwellings in Hove, including co-working spaces and public gardens.

The health sector saw a welcome boost with a £210 million new build at the science campus at Birmingham’s Health Innovation Campus, won by John Sisk & Son. BAM won three contract awards, including the £220 million expansion of Sheffield Hallam University.

Morgan Sindall picked up five new contract awards worth a combined £187 million, and Kier Group secured 16 new contract awards valued at a combined £72 million.

London took the number one slot on the regional run-down, reporting 81 new projects valued at just over £1.62 billion. Housing retained its crown as the leading sector, delivering 127 projects valued at more than £2.2 billion. However, education also enjoyed an upbeat month, reporting 54 projects valued at more than £730 million.

NOVEMBER 2021

UK construction headed into the festive period with much to look forward to in 2022 after £5.1 billion of new contract awards for November, a welcome total given that this month marks the beginning of a slow and inexorable slide towards Christmas.

Leading the charge was Wates with 11 contracts valued at £557 million. The largest of these was a £157 million mixed use development on London’s Surrey Quays Road and Canada Water Dock, including a 35-storey building made up of 168 apartments and extensive office space.

Claiming second place was Winvic, courtesy of a six contract haul valued at a combined £400.8 million. The largest of these and the largest single contract award of the month was for a £220 million distribution centre at Sutton Coldfield.

A joint venture between Galliard Homes, Apsley House Capital and Wavensmere Homes secured two project wins, including a £150 million contract to build 400 new homes near Ipswich. In all, 13 companies picked up in excess of £100 million in new contract awards. 156 pure housing projects were recorded during a month in which house building accounted for almost 40% of new projects.

Regionally, London led the way with 116 new contract awards valued at a combined £1.19 billion. The West and East Midlands (£705 and £194 million respectively) enjoyed more positivity. 

Scotland reported a total of £237 million, but lagged behind Yorkshire which reported 12 new contract awards valued at £270 million.

There was a hope that the year’s total might surpass £90 billion mark, but £85 billion remains an all-time high and it should provide the confidence the industry needs as it prepares for 2022.

There are threats, of course. The skills shortage has not gone away, materials remain in short supply and cement prices are scheduled to rise.

The removal of the red diesel tax rebate now looms large on the industry’s horizon and is just one of many environmentally-based issues that could impact negatively on the wider sector.

But, for now, the industry is precisely where it should be. And after decades of peaks and troughs, a season of stability is surely welcome.

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