Conspicuously Contrarian

With the spectre of Brexit now looming large on the economic horizon, the UK construction industry has delivered a record-breaking set of new contract award figures for the month of February 2019. Builders’ Conference CEO Neil Edwards tries to explain the apparently inexplicable.

February is the shortest month of the year so, traditionally, it has served up some of the lowest monthly construction new contracts totals researched by Builders’ Conference which go to making up the BCLive league table. It does not enjoy the post-festive period upswing that characterises January and, this year, February serves as the beginning of the final countdown to Brexit and all the uncertainty that brings with it.   

But the UK construction sector is notorious for ploughing its own furrow whilst marching to the beat of its own distinctive drum. So wouldn’t you just know that the UK construction sector would fly in the face of tradition and expectation by enjoying one of the biggest months of new contracts since the BCLive league table was created?

Storming into top spot on the monthly countdown of new contract awards is Lendlease with a single urban regeneration contract for Peabody valued at a remarkable £4.0 billion (although some media outlets are reporting that the 30-year programme might ultimately be worth as much as £8.0 billion). That contract is a mixed-use development at Thamesmead Waterfront in London and includes up to 11,500 homes together with retail and commercial buildings. This landmark contract – the largest single new contract award in BCLive league table history – also serves to push Lendlease to the very top of the BCLive rolling year table which is also experiencing an all-time of £70.22 billion.

Second on both the rolling year and on the monthly BCLive league table is Kier Group which picked up a staggering 45 new contracts during the month of February 2019 worth a combined total of £997 million. The largest of these is a £300 million new build, mixed-use development at Blossom Street in east London for client British Land.

In a month which housing delivered over £2.0 billion of new contract awards, Galliford Try leapt into third position with a £275 million contract for Ealing London Borough Council.   That contract will include the creation of 471 new homes, 50 percent of which will be affordable, together with a new council headquarters, a new library, retail premises and a commercial parking area. This was one of five new contract awards picked up by Galliford Try this month, worth a combined £381 million.

Mace claimed the number four position in February 2019 with a four contract haul worth a total of £280 million. This includes the construction of a new academic facility at the London School of Economics & Political Science in Lincolns Inn Fields, Westminster. As a further demonstration of its prowess in the education sector, Mace also bagged the £100 million contract to alter and convert part of the University College London, again in Westminster.

At number five is Multiplex with a single £250 million contract for the construction of new dwellings at Chelsea Barracks in south west London. Meanwhile, Balfour Beatty’s rail division picked up a £220 million London Underground track renewal contract with TFL Transport for London to push the company into sixth place.

In a month in which the BCLive league table recorded a total of 636 new contract awards split amongst 390 individual companies, Colmore Tang Construction – an occasional visitor to the BCLive league table Top 10 – claimed seventh spot courtesy of a single £200 million new build at Connaught Square in Digbeth, Birmingham for client Seven Capital PLC. That contract will include 770 new apartments, a 27-storey landmark tower, 3,900 m2 of commercial space, a community gymnasium and a boxing academy.

With a total of just over £6.0 billion in new contract awards, London was far and away the regional leader in February 2019. But, as is fast becoming the norm, the West Midlands came in second with over half a billion pounds of new work allocated.   

Quite how you explain such an anomalous and uncharacteristic upsurge in the shortest month of the year, frankly, is anyone’s guess. Was it simply a reflection that the industry didn’t quite get its ducks in a row during January? Is it a pre-emptive thumbing of the nose in the direction of the economic naysayers that are predicting a Brexit-fuelled economic collapse? Who knows?   But construction remains the barometer of the UK economy. Based on the figures from February 2019, other industries would do well to follow this remarkable and largely inexplicable lead.

Quick review of BCLive table for February 2019

• 390no companies were detailed as winning new contracts during February 2019

• 636no new construction orders are detailed on BCLive

• Lendlease secure overall top spot with £4.0 billion 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 Kier Group as well

• Kier Group had the most number of new construction orders in the month with 45no.

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