Impossible to Ignore
The stats don’t lie, and the story they’re telling on the BCLive league table for July 2017 is a worrying tale of slackening demand with more than a hint of a downturn about them. The Builders’ Conference CEO Neil Edwards reports.
Ever since we finally shook off the after-effects of the recession, the BCLive league table had grown accustomed to a monthly total of new contract awards around the £4 billion mark. Sure, there have been deviations and fluctuations along the way. But £4 billion per month based on around 600 new contract awards each month had become the new norm.
In July 2017, we recorded just 351 new contract awards with a combined value of just £2.24 billion. That is the lowest monthly figure since December 2012. Only 5 of the Top 10 on the BCLive league table secured more than £100 million in new work during the month. The rolling year total – which stood at almost £57 billion 18 months ago – is now down to just £44 billion. And forward tenders – a key indicator of likely workloads four or five months hence – remain ominously depressed as well.
Little wonder. Construction sentiment thrives on clarity and stability, both of which are rare commodities in the world today. The UK government currently seems able to focus only on the Brexit machinations; President Trump is shuffling his cabinet faster than a Vegas croupier, and the Far East is a hotbed of sabre-rattling and misplaced demonstrations of military might.
Against this troubling global background, Kier Group rose to the top of the BCLive league table, securing four new projects with a combined value of £145.9 million. The largest of these is a £75 million new build at Manchester Metropolitan University where the company will create 30 new consulting rooms, 60 en-suite bedrooms and a range operating theatres.
Multiplex stole the second spot with a single contract award worth £115 million for the new build mixed use development at London’s Royal Albert Dock for client ABP (London) Investment.
Third place went to a newcomer in the BCLive Top 10, Shropshire-based RGB which secured five new contract award worth a combined £108 million. Among these is a £32 million award for the construction of new student accommodation in Portsmouth where the company saw off stiff competition from the likes of Bouygues and Osborne Construction.
Galliford Try and Skanska recorded new contract award hauls of £107 and £100 million respectively to claim the fourth and fifth place on the league table. Morgan Sindall, the sector’s “old reliable” once again claimed the award for the highest number of new contract awards collecting 14 worth a combined total of £98.5 million.
The new contract awards picked up by the companies occupying the BCLive Top 10 are the exceptions. Elsewhere, a fall in contract award volumes and values represents a worrying return to recessionary levels. And while it is too soon to batten down the hatches, there is now a very real danger that the wider construction sector could be sleepwalking into a new paradigm of reduced workloads.
That might sound like the prediction of a doom-monger. But it’s there in black and white. Our stats don’t lie.
Quick review of BCLive table for July 2017
· 221no companies were detailed as winning new construction orders during July 2017
· 351no new construction orders are detailed on BCLive
· Kier Group secure overall top spot with £145.9 million of new work
· New orders in £1M to £5M category, Neilcott Construction from Orpington in Kent came out on top & in the £1M and under category Keepmoat Group were the winners
· Morgan Sindall Group plc secured the most number of new construction orders in the month with 14no