Cause for Optimism

In a working month shortened by festive holidays, the UK construction industry still managed to deliver a set of contract awards figures that give cause for optimism for 2018. The Builders’ Conference CEO Neil Edwards analyses the table for the last time in 2017.

December is traditionally a quiet month for the UK constructions sector in general and for the BCLive league table in particular. And this year – with the working month shortened by more than a week by the fall of the festivities – was no exception. But the BCLive league table still delivered a comparatively positive monthly total of more than £2.158 billion spread across 182 individual companies to end the year on a relative high. Even though that marks a marginal decrease from the £3.05 billion recorded in December 2015 and the £2.58 billion from December 2015, the latest monthly stats provide sufficient cause for optimism into 2018.

In a month that saw each of the Top 5 amass more than £100 million of new contract awards, Lendlease scaled to the top of the pile with a pair of contracts worth a combined total of £115 million. The largest of these is a £73 million contract to extend offices at 1 Triton Square in North West London for client British Land PLC.

Fellow high-flyer ISG came in a very close second with an eight project haul worth a combined £114.1 million. The most notable of these is a £27 million new build of student accommodation in Cardiff’s Capital Quarter. Kier Group - which had already bagged the Contractor of the Year trophy at the BCLive Awards earlier in the month thanks to a more than £2 billion annual contract haul – took third place in December 2017. The company bagged an impressive 16 haul with a combined value of £113.1 million including a £25 million new build at Queen Margaret Academy in Ayrshire.

The end of the calendar year also afford and opportunity to look back over a roller-coaster year for UK construction demand and sentiment.

Over a 12-month period, the BCLive league table recorded £53.1 billion of new contract awards shared amongst 6,438 individual contracts and almost 1,500 companies. On the upside, this outcome is the second highest total recorded since the table’s inception. On the downside, that annual total contains almost £7 billion worth of work earmarked for the massive HS2 project. Without that, the BCLive league table would be off by around 20 percent.

Housing also made a massive contribution to the annual total, providing more than 30 percent of new contract awards by both volume and value. Elsewhere, schools, colleges and universities delivered more than 1,400 individual projects with a combined value of just over £8 billion.

It will surprise no-one to learn that Greater London was the most active region in 2017, contributing more than 1,300 new projects with a combined value of £14.7 billion. In a distant second came the West Midlands which added 433 contracts worth £5.95 billion while the North West recorded 582 new contract awards worth £4.83 billion.

Also notable in 2017 is the fact that former Prime Minister David Cameron’s stated aim to decrease public spending whilst encouraging private investment finally bore fruit. The public sector contributed 2,902 new contract awards worth £22.788 billion while the private sector amassed 3,516 new contract awards with a combined value of £30.256 billion.

All things considered – Brexit, the Trump presidency, industry-wide skills shortages – the past year could have been a great deal worse.   And having demonstrated its trademark resilience in slower months, the UK construction industry has every right to enter 2018 with a degree of cautious optimism.

Quick review of BCLive table for December 2017

· 182no companies were detailed as winning new contracts during December 2017

· 300no new construction orders are detailed on BCLive

· Lendlease secure overall top spot with £115 million of new work

· New order winners in £1M to £5M category was Kier Group & the £1M and under category went to Sunninghill Construction Ltd from West Sussex

· Kier Group also secured the most number of new construction orders in the month with 16no

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