Feasting Upon False Dawns

In a month in which all political, economic and seasonal indicators pointed towards a downturn, the UK construction industry chose to self-identify as upward and upbeat.   Builders’ Conference CEO Neil Edwards looks on disbelievingly.

In March this year, the month in which the UK was originally scheduled to bid a not-so-fond adieu to the European Union, construction contract awards rose to £6.85billion.   This past month, the month to which Brexit had been rescheduled, new contract awards researched by Builders’ Conference spiked once again, topping £7.51 billion. Based upon this pattern, UK construction companies will be rubbing their hands with glee for January 2020 and, if they’re lucky a further extension to Brexit negotiations.

In a month that defied all logic and good sense, it came as no surprise to see Ardmore Construction top the BCLive league table; a single contract award pushing the company to the top of the table for the first time.   Valued at £480 million, that contract is for the construction of a new hotel on the site of the old War Office in Westminster, south west London.

Engie UK Ltd, a company which is making a habit of occupying a place in the BCLive top 10, claimed second place this month with a haul of 13 new contract awards valued at a combined £333 million.   The largest of these is a £200 million student accommodation new build for the University of Leicester that will include 1,164 new student homes across seven blocks together with the refurbishment of a Grade II listed building and the construction of a 500-space car park.

Costain achieved a notable double this past month, claiming the number three position as part of a joint venture with MWH Treatment and the number seven position as a stand-alone entity.   That joint venture secured a £325 million refurbishment and repair contract with Southern Water which will run for five years and cover both water supply and wastewater treatment.   

Costain’s stand-alone project is a £207 million road construction contract for Lancashire County Council on the M55 and A583 Blackpool Road.

Housing propelled Crest Nicholson and Redrow Homes into fourth and fifth place respectively.   Crest Nicholson collected five new contract awards during the month valued at a combined £267.5 million.   The most notable of these is a £187 million new build of 273 new dwellings on the site of the former Lord Mayor Treloar Hospital in Alton, Hampshire.

In a month characterised by unpredictability in which the top 17 on the BCLive league table each passed the magic £100 million mark, it was left to Morgan Sindall to restore some sanity, once again claiming the highest number of new contract awards (22) worth a combined £255.3 million.

Regionally, London was responsible for almost £2 billion of the massive monthly total. However, the North West (£759 million), Scotland (£410 million) and Hampshire (£421 million) all enjoyed an upswing.

By posting such positive figures in the month of October 2019, the UK construction industry can now begin to look forward to a well-deserved festive break.   But, as ever, there is a caveat.

October also saw the demise of the much-respected contractor, Simons Group. Although, at the time of writing, the post-mortem has barely commenced, all indications are that the company was, perhaps, too reliant upon a declining retail sector; placing too many of its eggs into a single sector basket.   In October this year, much as it has for the past two years or more, the housing sector contributed more than a third (44 percent) of all UK construction contract award activity.

Food for thought while we all feast upon the latest Brexit false dawn.

Quick review of BCLive table for October 2019

  • 443 no companies were detailed as winning new contracts during October 2019
  • 755no new construction orders are detailed on BCLive
  • Ardmore Construction Ltd secure overall top spot with £480 million order
  • New order winners in £1M to £5M category went to Morgan Sindall Group and the £1M and under category went to Thomas Armstrong Ltd who are based in Cumbria.
  • Morgan Sindall Group had the most number of new construction orders in the month with 22no.

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