Bounce-back Begins - July 2020 Review & Commentary of Construction Contracts Researched By Builders

After two consecutive months in which it appeared the COVID-19 crisis had finally taken the wind out of the UK construction sector’s sails, research carried out by Builders’ Conference shows that the industry has bounced back in July 2020 with an above average performance, which further underlines its new-found resilience.  Builders’ Conference CEO Neil Edwards reports.

There was a time, in the not too distant past, when the UK construction sector was notoriously skittish and easily startled.   The mere mention of the term recession could send it scurrying for cover.   It might not re-emerge for months or even years.

But that was then.   The construction industry of today has, apparently, evolved a thicker more resilient skin.   In the past few years, it has soldiered on through an on/off Brexit, prime ministerial changes, a Chinese/US trade war and a global pandemic while barely breaking stride.   

Admittedly, May and June saw new contract awards levels dip below the £4 billion per month mark that has become the accepted average.   But coming off the back of two months in which the sector hit £8.2 billion and nearly £10 billion, the industry could be forgiven for catching its breath.   And now, even as the naysayers were preparing to pronounce UK construction as the latest victim of the Coronavirus, the industry has bounced back with a £5.4 billion total for the month of July to demonstrate its mettle once again.

That figure was unquestionably buoyed by a single £1 billion new contract award. But even without that, the sector would have topped the £4 billion mark, a notable accomplishment in a month that traditionally foreshadows the summer lull.

That mega-contract was won by Berkeley Group which fittingly topped the BCLive league table in the month in which its founder and industry titan Tony Pidgeley sadly passed away.   That contract will see the former Parcelforce depot in London’s West Ham redeveloped to provide over 1,800 homes as part of the wider Twelvetrees Park development that will also include a 4.5 acre park and community, retail and commercial space.

Inland Homes stormed to an unprecedented number two position on the BCLive league table with a single mixed use development contract award valued at £650 million.   That contract, for Broxbourne Borough Council, includes 1,725 new homes together with 19,000 m2 of commercial space and a new primary school as part of a new “urban village” at Cheshunt Lakeside.

Bouygues Group collected three new contract awards worth a combined £521 million to take the number here position on the BCLive league table.   The largest of these is the £250 million extension to the Evelina Children’s Hospital in London’s Westminster.

Redrow Homes bagged 10 new contract awards valued at a combined £328 million to claim the number four position.   The most notable of these is a £250 million new build for 250 houses, a neighbourhood centre and retail facilities at the Oakdene at the Hoplands development in Canterbury in Kent.

Emerson Group claimed the title for July’s busiest contractor and the number five position, collecting a total of 22 new contract awards worth a combined £180.5 million.

Equally notable is sixth-placed Multiplex which picked up a single new build contract valued at £140 million for the construction of a 13-storey tower block in Glasgow’s York Street for client Osborne & Co.   That tower block will comprise more than 25,000 m2 of Grade-A office space.

Regionally, London was the runaway leader with more than £2.0 billion in new contract awards. Hertfordshire and Kent – with £736 and £419 million respectively – claimed second and third positions while Scotland marked the end of its COVID-19 lockdown with a welcome £264 million haul.

Sector-wise, the miscellaneous category reigned supreme in July 2020 with a total of £1.9 billion thanks to a large number of mixed-use developments.   However, those mixed-use developments generally comprise a degree of housing and accommodation.   Stand-alone housing developments also accounted for more than £1 billion, reconfirming the industry’s continued reliance upon the housing sector.

A further imbalance also now exists in the ratio of public and privately-financed works which has seen a complete reversal since former Prime Minister David Cameron set out to encourage private investment.   During his time at Number 10 Downing Street, construction funding was roughly 60:40 with public finance footing the larger bill.   In July, that ratio had switched to 70:30 with private investment now carrying the burden.

Regardless of these imbalances, it is construction’s willingness to soldier on in the face of adversity that is the most notable factor of the contract awards in July 2020.   The construction industry of old would be singing the blues right about now whilst rubbing its wounds.   The construction industry of today, however, is channelling its inner Chumbawamba and singing “I get knocked down, but I get up again”.

Quick review of BCLive table for July 2020

259 no companies were detailed as winning new contracts during July 2020

430 no new construction orders were researched by Builders’ Conference all detailed on our UNIQUE BCLive league table

Berkeley Group secures overall top spot with £1.01 billion of new orders

Emerson Group secured most number of new construction orders in the month with 22no totaling £181 million

Never before has Builders’ Conference independent, verified real-time, construction information and research been more important in allowing the construction industry to play a significant role in how the UK economy emerges from these unparalleled circumstances due to COVID-19

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Watch our CEO Neil Edwards below talking July 2020 construction contracts with Mark Anthony from the Business Briefing at the Demolition Daily

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