Neither Fish Nor Fowl - June 2022 Commentary Of Contracts By Builders Conference
Construction contract awards for June 2022 hit a very healthy £5.9 billion. But with the number of contracts and the number of companies winning contracts markedly down on the previous month, it is difficult to paint this in a wholly positive light. Builders’ Conference CEO Neil Edwards delves into the details to make sense of it all.
On the face of it, a monthly BCLive league table total that fell just a whisker short of £6.0 billion should be cause for celebration; for the construction industry to pat itself on the back on a job well done. Furthermore, 13 individual companies won contracts worth more than £100 million each to ensure that they can afford a punnet or two of strawberries at Wimbledon.
But there is a growing disquiet in construction circles. So rather than entering the summer period with a spring in its step, the sector appears to be looking over its collective shoulder.
A good deal of that disquiet comes from beyond the industry itself: fuel costs; the availability and price of materials; and creeping inflation have conspired to make even the most optimistic industry forecasters narrow their eyes with concern. But the number of contracts recorded in June 2022 was down 19 percent on the month of May; and the number of contractor winning that work was down by 20 percent. It is not yet time to launch the lifeboats; but it might be wise to check that they are seaworthy.
Despite all this, the team at Winvic will unquestionably in self-congratulatory mood. The company bagged the biggest single contract of the month: a £1.0 billion project for the construction of a mammoth industrial hub in Cannock, Staffordshire for client Oxford Properties. That hub will comprise over 8.0 million square feet of commercial space, with state of the art units ranging from 200,000 to 1.2 million square feet, all supported by its own dedicated rail hub enabling multi-modal movement of goods around the UK West Midlands Interchange.
Coming in at a distant second place behind Winvic’s £1.2 billion monthly total is a joint venture between Wates and Kier. The JV picked up six new contract awards during the month – all of them related to the upgrading and improvement of prisons for the Ministry of Justice - worth a total of £504 million. The largest of these is an £84 million contract to extend Bullingdon at Bicester in Oxfordshire.
Having secured second place on the BCLive league table as part of a joint venture, Kier Group also secured the third place as a stand-alone entity. The company secured 15 new contract awards that together were worth £337 million. The largest of these is a £300 million design and build contract for a new dual carriageway at the A417 Missing Link at Birdlip in Cirencester.
Helping to maintain the dominance of the house-building sector is Countryside Properties which secured £257 million of new work divided across five individual contracts. The most notable of these is a £200 million contract award for the creation of 750 new residential units for client The Guinness Partnership at Tolworth in Surrey.
Those Countryside Properties projects were among 110 new house building projects secured during the month that were worth a combined £1.27 billion. This meant that house-building retained its position as the busiest sector, narrowly pipping the factories and industrial (£1.14 billion) into second place. Roads, pathways and cycleways contributed a further £667 million while offices eased back (£363 million this month against £592 million last month).
Regionally, not only did London lose its familiar top slot, it also failed to break the £1.0 billion mark it has enjoyed for so long, accounting for just £815 million split across 92 individual projects.
The nation’s capital was beaten into third place by the South West (£1.22 billion) and the West Midlands (£1.2 billion). Scotland delivered a comparatively poor £223 million in new work while Wales continues to languish, contributing just eight new contract awards valued at under £37 million.
And so, as the UK construction industry begins the inexorable slide into the summer season, we should be thankful for a near £6.0 billion monthly total; we should be concerned at the slowing of contract award numbers; and we should, perhaps, be thankful that we’re not reliant upon the Welsh region to keep the sector afloat.
Quick review of BCLive table for June 2022
232 no companies were detailed as winning new contracts during June 2022
Winvic secured overall top spot with a single contract worth £1.26 billion
Morgan Sindall Group was the company with the most number of new construction orders in the month with 23no totaling £137.5 million
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Full & Interactive BCLive table for March 2022 can be found HERE