Back on Track

After a momentary glitch over the festive period, the UK construction sector first returned to and then exceeded normal levels to get 2019 off to a flying start.  Builders’ Conference CEO Neil Edwards reports on a momentous return to form.

After 11 consecutive months in which the value of new construction contract awards did not dip below the £4.0 billion mark, the £2.92 billion posted in December 2018 was a bitter disappointment filled with ominous portent. But the industry first returned to and then surpassed the £4.0 billion norm to hit £5.8 billion in new contract awards, pushing the rolling year total on the BCLive league table to a record-breaking £63.3 billion and – temporarily, at least - allaying fears that December was the beginning of a pre-Brexit wind-down.

Leading the charge on the BCLive league table for January 2019 is Mace which picked up three new contract awards worth a combined total of £505 million.   The largest of these – and the first of a number of mixed-use development projects to make a mark on the month’s figures – is a £350 million new build at Paddington Square in West London for client Sellar Property Group. That development will comprise a 17-storey block containing office accommodation together with bars, cafes and retail outlets.

Dipping under the wire to claim second spot is Sir Robert McAlpine which picked up six new contracts during the month worth £453 million. The largest of these, which was announced on the last day of the month, is a £350 million rebuild in the City of London. Planners have given the green light to the demolition and subsequent redevelopment of 1 and 2 Broadgate to replace 42,000 m2 of office space into almost 74,300 m2 of space with around 21,400 m2 in the bottom four floors set aside for shops and leisure.

Another mixed-use development, again in London, helped push Kier Group into third position with a 21 contract haul valued at a total of £397.1 million. The most significant of these is another mixed-use development, again in London, valued at £70 million for client Kings Cross Central Partnership at Lewis Cubitt Square in Kings Cross. This new build is for a 12-storey building comprising nine floors of offices, a 600-seat theatre and retail space on the ground floor.

Skanska picked up one major contract to take the number four position on the BCLive league table for January 2019.   That contract is for the refurbishment and repair of the M42 motorway at Junction 6 in Solihull. The client is Highways England.

The nuclear power station at Hinkley Point C is the gift that keeps on giving. Balfour Beatty has been awarded the £214 million contract for the North and South 400 kV overhead line project that will ultimately link the facility’s new nuclear reactor to the National Grid. Together with five smaller projects, this new contract award pushed Balfour Beatty to a monthly total of £277.8 million to claim the fifth spot on the BCLive league table.

Taking the sixth spot is Lendlease with a single new contract award for the refurbishment, repair and restoration of the Grade-One listed Manchester Town Hall in Albert Square.   This highly complex and challenging contract includes the restoration of the Great Hall and its Ford Madox murals as well as external repairs to the roof and stonework.

A joint venture between Volkerfitzpatrick and Morgan Sindall collected the £196 million contract to construct a 7.2 kilometre over-ground rail extension linking Gospel Oak to Barking Riverside in Essex.

A slight cooling in the housing market within London saw that sector shrink back. During the past year, the housing sector has consistently been responsible for a third or more of each month’s new contract awards.   

In January 2019, it accounted for less than a quarter at £1.364 billion. However, that shortfall was offset by marked increases in the miscellaneous/mixed-use sector (£1.052 billion), offices (£588 million), and education (£430.1 million).

London was, predictably, the largest contributor regionally with £1.42 billion. But the West Midlands – Builders’ Conference pick for the one to watch in 2019 – delivered almost £670 million while the South West and Essex each had good months with £665 million and £632 million respectively.

Quite whether this is the UK construction sector making hay while the pre-Brexit sun shines or whether this is a genuine return to form after the festive period hiccup remains to be seen. But for now, the sector remains in rude health.

Quick review of BCLive table for January 2019

• 404no companies were detailed as winning new contracts during January 2019

• 647no new construction orders are detailed on BCLive

• Mace Ltd secure overall top spot with £505 million of new work

• New order winners in £1M to £5M category was Kier Group with offices throughout the UK & the £1M and under category went to Seddon Group

• Kier Group had the most number of new construction orders in the month with 22no.

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