Return Of The Jitters March-22 Commentary of Contracts by Builders Conference

The BCLive contract award league table recorded nearly £5.8 billion during the month of March 2022, well ahead of the established £4.0 billion monthly benchmark.   But it is the manner in which it achieved that impressive monthly total that is stirring familiar feelings of concern.   Builders’ Conference CEO Neil Edwards looks back over a mixed month.

It was inevitable, of course.   In the field of construction, highs follow lows and troughs follow peaks just as sure as day follows night.   But having faced down the double threat of both Brexit and a global pandemic without breaking stride, it was starting to feel like the good times would last forever.   They yet might.   But alarm bells are apparently ringing among the more skittish of industry watchers.   The concern now is that those jitters could yet prove contagious.

Such reaction is not surprising.   Despite the resilience shown during the Brexit countdown and the COVID-19 pandemic and resulting lockdowns, the sector has been pounded with a host of new challenges.   The skills shortage shows no signs of abating; materials prices are rising with no apparent ceiling in sight; and energy costs are the water cooler topic du jour.

For a time, it looked as if the industry was planning to push aside those obstacles.   In the first 10 days of March 2022, the BCLive league table recorded more than £3.3 billion in new contract awards.   The final two thirds of the month told a very different story.   First there was the dawning realisation that the war in Ukraine was not just a flash in the pan.   Then came the Chancellor’s Spring Statement, which brought comfort to few and concern to many.   And then the month ended with the removal of the subsidy on the red diesel that has fuelled the sector for some 60 years.   New contract awards slowed, ending the month more than 33 percent down on the £8.6 billion recorded in the same month last year and also down on the £6.2 billion posted in the preceding short month of February.

Top of the tree in March 2022 was Mace, which collected three new contract awards with a combined value of £725 million.   The largest of these is the construction of a new eight/nine storey tower block comprising 30 new dwellings at Audley Square House in Westminster for client Caudwell Properties.   That development will also include a swimming pool, gymnasium and roof terraces together with hard and soft landscaping and vehicular access to Waverton Street.

In second place – but £400 million behind Mace – was Sisk Group which picked up a single contract valued at £325 million.   That project is a refurbishment and repair framework at Dublin Airport that will include the upgrading of pavements, drainage and electrical systems at the boarding gate piers, aircraft stands, aprons and taxiways.

Willmott Dixon secured eight new contract awards worth a total of £311 million to take the third position on the BCLive league table for March 2022.   The largest of these is a transport hub new build alongside the A6 and Mersey Square in Stockport, part of the Pagabo major works framework.

Skanska claimed the number four spot with a pair of new contract awards valued at a combined £242 million.   The most notable of these is a £235 million new build green office scheme at Victoria Street in Westminster on the site of the former House of Fraser store.   The new 43,700 square metre building will provide commercial office space over 16 floors together with retail space at ground level.   According to client Welput, the new tower will be the “UK’s largest all-electric, net zero office building”.

Bowmer & Kirkland notched up an admirable £187 million split across six new contract awards to claim the fifth position.   The most notable of these is a £60 million new office build; the first phase in a £200 million development that will transform the former police headquarters at St Michaels in Southmill Street in Manchester.

Regionally, London retained the crown as the busiest and most lucrative area with 131 new contract awards valued at more than £2.1 billion.   The North West (618 million) enjoyed a welcome upturn in activity while the South West also saw an uptick to £485 million.   The East and West Midlands – until recently buoyed by HS2 and the Commonwealth Games – slipped back to £105 and £253 million respectively while Scotland also slipped to £275 million.

Housing, predictably, contributed the lion’s share of activity during the month with 161 new contract awards valued at a combined £1.87 billion.   Offices enjoyed an excellent month, climbing to £1.08 billion split across 62 individual projects.   The education sector added a further £567 million while health and welfare produced a further £447 million.

It is far too early to utter the dread word “downturn”.   But the spider senses of industry economists will have surely tingled in that old, familiar way.   And if history has taught us anything, it is that perceived concern can quickly become real concern; that the merest mention of the word downturn can spark a downturn in industry sentiment and – ultimately – in industry output.

The hope now is that this is merely a blip; a pothole on a road that is still pointing onwards and upwards.   The BCLive league table figures for the next few months will make for interesting and vital viewing.

Quick review of BCLive table for March 2022

315 no companies were detailed as winning new contracts during March 2022

490 no new construction orders were researched by Builders’ Conference all detailed on the UK’s only Live league table of construction contract awards BCLive

Mace secured overall top spot with a single contract worth £725 million

Kier Group was the company with the most number of new construction orders in the month with 16no totaling £117.2 million

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Full & Interactive BCLive table for March 2022 can be found HERE

 

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