Hitting the Ground Running

The UK construction sector has laughed in the face of Brexit, HS2 uncertainty and the suspension of the much-lauded Smart Motorways scheme to post an almost unbelievably positive set of new contract awards for January 2020.  Builders’ Conference CEO Neil Edwards looks on admiringly.

Brexit?   Pah! That seemed to be the UK construction industry attitude in January 2020 when the sector delivered a set of new contract awards figures that would be impressive at any time but which are nothing short of miraculous, given the timing.

The month in which the UK finally exits the European Union concluded with the Sword of Damocles swinging over both the HS2 high-speed rail network and the Smart Motorway initiative, however despite all this, verified research carried out by Builders’ Conference trade body & highlighted via the unique BCLive league table an almost record-breaking total of new contract awards, finishing the month on a staggering £7.77 billion.   Of the 400-odd companies winning work during the month, an unprecedented 19 picked up more than £100 million of new contract awards. And while London and housing continue to reign supreme in the respective regional and sector rankings, January 2020 saw a far greater and very welcome spread of work.

At the top of the heap is a joint venture company comprising – among others –Atkins, Laing O’Rourke and Volker Rail – which has been selected to deliver a £1.2 billion refurbishment and repair contract as part of Phase 2 of the East West Rail redevelopment between Cambridge and Oxford.

Multiplex, meanwhile, enjoyed a phenomenal months.   The company collected three new contract awards, the two biggest of which are valued at £600 million.   The larger of the two is a £400 million mixed use development new build at Elephant & Castle town centre in London for client Delancey Estates.   This will include retail space, homes to rent, and a new cutting-edge campus for the London College of Communication. A second mixed use development new build for client Native Land – this time at Blackfriars Road in south east London – is valued at £200 million.

During 2019, Kier Group achieved a remarkable record, winning the equivalent of a new contract for almost every working day of the year.   The company has stated 2020 in a similar vein, collecting 22 new contract awards to claim the number three position on the BCLive league table and topping the countdown of the highest number of contracts secured.   The largest of these is a £100 million refurbishment and repair contract known as the Northamptonshire County Council Highways Works and Services project. That scheme is scheduled to last for 16 months, with the option to extend for a period of a further nine months.

Barratt Homes swept into fourth position on the BCLive league table with a total of eight new contract awards worth a combined £232 million.   The largest of these is a £100 million new build in Hackbridge, Surrey that comprises one and two bedroom apartments and three and four bedroom houses.

Laing O’Rourke claimed the number five position courtesy of a single £200 million mixed use new build development at Deansgate in Manchester.   This includes residential, retail and leisure space, a hotel, public spaces and car parking and not forgetting their involvement in the EWR Alliance.

With a contribution of over £3.4 billion, housing was – predictably – the biggest sector by a country mile.   But, buoyed by the East West Railway (EWR) project, railways enjoyed a healthy month, notching up £1.355 billion in new contract awards.

That EWR project also skewed the regional figures to push Oxfordshire into second place with £1.23 billion of new work behind London with £1.79 billion.   But with figures of £586, £545 and £501 million respectively, the West Midlands, North West and East Midlands all enjoyed notable months.

Quite how the HS2 and Smart Motorway cards might fall is very much in the lap of the Gods.   If the cards fall in the wrong direction, the nation could yet consign itself to a gridlocked future in which neither our roads nor our railways have the capacity required by a modern society or go anywhere near of achieving future environmental targets & issues.   The impact upon the UK construction sector is potentially catastrophic.

But, for the time being at least, the UK construction industry shows no signs of slowing.   Indeed, for all the external threats and uncertainties, January 2020 finds the sector in fine fettle.

Quick review of BCLive table for January 2020

  • 404 no companies were detailed as winning new contracts during January 2020
  • 668no new construction orders are detailed on BCLive
  • EWA Alliance secures overall top spot with £1.2 billion order
  • New order winners up to £1M went to Morgan Sindall Group with the £1M to £5M category going to Kier Group
  • Kier Group also secured most number of new construction orders in the month with 22no.

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SOURCE: Builders’ Conference