UK construction industry is ‘an unstoppable force’ says Builders’ Conference

The UK construction industry flexed its muscles yet again in February 2021, posting an astonishing £8.0 billion in new contract awards in the shortest month of the year research carried out by Builders’ Conference shows.

In this article CEO of Builders Conference’ Neil Edwards looks on admiringly but remains concerned at the industry’s ability to keep pace with its own success.

There was a time when the confidence of the UK construction sector was a timid creature that was easily startled and that fled at the smallest sign of alarm. But that timorous fawn of old has given way to a rampaging gorilla; a seemingly unstoppable force that has met head on the triple threat of COVID-19, Brexit and wider economic jitters. And rather than running scared, the sector continues to charge forwards.

In February – a cold and traditionally bleak month – the UK construction industry posted an astonishing £8.0 billion in new contract awards. And this was no HS2-fuelled anomaly.   

In the absence of a single £1.0 billion+ landmark project, some 340 contractors shared the spoils while each of the Top 20 on the BCLive league table won new work valued at more than £100 million during the month.

Top of the pile was project management company Avanton, which was credited with two notable contract wins in the month worth a combined £980 million. The largest of these – valued at £730 million – a new build housing development at Ruby Triangle in Lewisham, south London. Designed by renowned architect Farrells, the project comprises 1,152 dwellings together with retail business and community spaces and a public sports hall and gym. The work will be carried out in conjunction with A2 Dominion Group.

In addition to winning the month’s largest single contract, Avanton also won a £250 million urban village development at the former Homebase site in Richmond upon Thames. That project will add a further 385 residential units to the UK housing stock, together with flexible business, retail and community space.

In second place, and a long way behind in value terms, was Laing O-Rourke, which bagged a single £385 million contract in February. That contract is the redevelopment of Whiteleys at Queensway in London’s prestigious Bayswater area and will include more than 100 new residencies, 20 shops and a new Six Senses hotel and spa.

Interestingly – like the number one position – third place on the BCLive league table was secured by a project management company. Tenacity International Group won a £200 million new contract award for a mixed-use development at Gracechurch Street in East London. Split across 33 storeys, the development will include 72,000 m2 of flexible office space, 1,800 m2 of retail space and 1,500 m2 of public access space. A free-to-access public gallery at levels 29 and 30 will offer views across London.

The battle for supremacy in the most contracts secured in a single month favoured Morgan Sindall this month, the company temporarily wresting the crown from rival Kier Group with an impressive 26 new contract awards valued a combined £311.5 million (Kier Group won 21 new contract awards for £116 million to finish in 17th position). The largest of the Morgan Sindall contract awards was a £120 million 500 dwelling residential development at Littlemoor in Weymouth.

VolkerWessells claimed the number five position with a creditable eight new contract awards valued at a combined £269 million while sixth position went to BAM with £254 million across five contracts.

Against the background of such an unseasonably positive month, it seems almost churlish to mention the negatives. Despite the resurgence of Scotland (£458 million) and the exceptional performance of the Midlands (£774 million) and Yorkshire (£412 million), the regional imbalance still favours London that contributed an impressive £3.36 billion to the monthly total.

A similar imbalance remains in the split of workload among the various industry categories. The housing sector contributed £3.52 billion of known work and will have been a large part of a further £1.52 billion of mixed use and miscellaneous work. Warehouses & Industrial units with £637.9 & Offices, with £479 million, came a distant second & third respectively.

Also worthy of note is that the split between publicly and privately funded work, continues to widen. By value, privately funded works accounted for around 80 percent of all new contract awards, suggesting a post-COVID tightening of the Government’s purse strings.

And, like an ever-present elephant in the room, the spectre of a worsening skills shortage continues to haunt the sector. Quite how the industry will meet the demand of £26 billion in new work in the space of just three months remains open to question.

But, for the time being, the construction sector looks set to retain its position as the saviour of the UK economy.

Quick review of BCLive table for February 2021

  • 340 no companies were detailed as winning new contracts during February 2021
  • 600 no new construction orders were researched by Builders’ Conference all detailed on the UK’s only Live league table of construction contract awards BCLive
  • Avanton Ltd secured overall top spot with a single contract worth £980 million
  • Morgan Sindall Group secured most number of new construction orders in the month with 26no totalling £311.5 million

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