A World Turned Upside Down - April 2020 Review & Commentary Of Construction Orders
A World Turned Upside Down
The UK construction sector continues to confound and confuse, delivering a record-breaking level by value of new contract awards from verified research carried out by Builders’ Conference amidst a global pandemic. Builders’ Conference CEO Neil Edwards is equal parts bemused and impressed.
Back in 2008 and 2009, when the UK construction industry was in the grip of one of the worst recession in living memory, the value of new contract awards regularly struggled to make it to and beyond the £1 billion per month mark; and each new economic jitter sent that figure lower.
Fast-forward a decade and the industry finds itself staring down the barrel of a potentially cataclysmic economic downturn; one that currently has economists cowering behind their collective sofas.
Yet in March when the COVID-19 lockdown began, the UK construction industry delivered nearly £8 billion in new contract awards. And this past month (April) the sector went further still, recording a staggering £9.7 billion however the number of new contract awards was nearly 25% down compared to last month at only 524 no projects with a significant proportion of these projects (nearly 50%) falling in the infrastructure sector.
Such a figure would be remarkable even in the middle of an industry boom. But arriving as it does amidst a global pandemic, it offers just a glimmer of optimism for an upswing in workloads when the lockdown finally comes to an end.
Riding high atop an already large pile this month is BAM Nuttall, which has three very good reasons for good cheer and positivity. The company claimed the number one position on the UK’s only Live table of construction contracts BCLive courtesy of a £2.2 billion refurbishment and repair contract with client Network Rail as part of the Transpennine Route Upgrade between Stalybridge and Leeds.
BAM Nuttall also secured part of the number two spot on the BCLive league table as part of a joint venture with Morgan Sindall Group. That JV was the successful bidder on a £1.8 billion, 10-year refurbishment and repair contract with Highways England as part of the ongoing Smart Motorway upgrade initiative. Together, those new contract awards pushed BAM Nuttall to the very top of the BCLive rolling year table that now stands at more than £75 billion.
Back in the real world, a monthly total of almost half a billion pounds would have pushed Mace to the top of the league. This month, however, a two-contract haul valued at a combined £497 million merely earned the company a distant third spot. The larger of the company’s two contracts is a £482 million new build office block at 40 Leadenhall Street in London that will provide almost a million square feet of space across two blocks of 14 and 34 storeys.
A newcomer to the upper echelons of the BCLive league table is Domis Construction, which this month surged to the fourth spot with a pair of contracts valued at a combined £400 million. The most notable of these is a £300 million new build at Manchester’s Albion Street that will include the erection of one 40-storey building comprising 375 residential apartments and a neighbouring 14-storey office block with ground floor commercial space.
In a month in which the housing sector found itself – temporarily, at least – usurped from its top spot on the breakdown of sectors, Inland Homes made it in to the BCLive league table’s top five, thanks to a single £200 million contract with Homes England for a new development of 600 homes in Basildon in Essex.
Pushing the infrastructure sector to even greater highs, a joint venture comprising VolkerRail, J Murphy and Siemens picked up a further £200 million of refurbishment and repair work on the Transpennine Route that includes electrification of the line between Leeds and York.
In all, 17 companies won more than £100 million of work in the month, while Kier Group picked up 15 new contract awards worth a combined £63 million to retain its crown for the largest number of contracts.
With more than £4.3 billion in new contract awards, infrastructure was the most active sector this past month, with housing still buoyant with just under £3.18 billion. As further evidence that we are living in strange times, London delivered more than £2.6 billion in new work but was beaten into second place on the regional countdown by Yorkshire with £2.77 billion.
There will, of course, be concerns over the industry’s ability to convert all these new contract awards into living and breathing construction work. In all likelihood, there will be a shortage of building materials when the lockdown ends while manufacturers ramp up production. A staggered return to work of staff to comply with social distancing measures could compound the existing skills shortage. And there will likely be a training lag as workers update competence cards that expired during the lockdown.
But the Builders’ Conference together with its unique BCLive league table deal only in facts. And the fact is that the UK construction industry picked up just shy of £10 billion in new contract awards in the month of April. Given all that is going on in the world that alone is surely reason for some good cheer.
Quick review of BCLive table for April 2020
284 no companies were detailed as winning new contracts during April 2020
524 no new construction orders were researched by Builders’ Conference all detailed on our UNIQUE BCLive league table
BAM Nuttall secures overall top spot with £2.26 billion of new orders
Kier Group secured most number of new construction orders in the month with 15no totaling £63.1 million
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