Rewriting the rulebook

With its refusal to be cowed by ongoing political uncertainty, the UK construction continues to confound and confuse with its seemingly unstoppable positivity. But is it heading for a fall? Builders’ Conference CEO Neil Edwards attempts to look beyond the facts.

Here’s how the UK construction industry is supposed to work. In the event of any kind of political or economic uncertainty, construction workloads take a hit, particularly in “luxury” sectors such as leisure and entertainment. When the house building sector is performing well, the infrastructure sector generally keeps pace to provide the transport and utility services all those new homes require. When there is the merest mention of any kind of General Election, the education sector enjoys a predictable surge as the incumbent government attempts to safeguard its position with some vote-winning investment.

Those unwritten rules have been in place since before most of us can remember and – consciously or otherwise – the entire industry has abided by them. Until now.

During April 2019, the housing sector accounted for approximately half of all the 750+ new contract awards reported on the BCLive league table yet the various road, rail, power and water sectors barely twitched. April generally sees the release of government funds for education but that largely failed to materialise pushing the education sector to fourth place on the BCLive table with its usual place in second spot being taken by entertainment and leisure.

Predicting the future of the UK construction sector has never been easy. But with the entire sector now apparently following a new set of rules, that task has become even harder. The best we can do, in this instance, is to report the facts, even if they too lead to further confusion.

In a month in which the BCLive league table topped the £6.0 billion mark for the fourth month in succession and in which some 13 individual companies won new contracts valued at upwards of £100 million each, Morgan Sindall swept to the top of the heap with an impressive haul of just under half a billion pounds in new work split across 26 contracts. The largest of these is a housing repair and maintenance contract with Waltham Forest London Borough Council that is valued at £195 million.

A major housing refurbishment and repair contract also helped push Engie into second place on the monthly total. The company picked up a total of 21 new contract awards this past month worth a combined total of almost £300 million; the largest of which is a term contract to upgrade housing across the Central Bedfordshire Council region, valued at £190 million.

Kier Group, a company that was almost a permanent fixture in the number one spot this time last year took the number three position with 19 new contract awards during the month with a combined value of £283.9 million. The most notable of these is a mixed-use development for Surrey Heath Borough Council in the centre of Camberley that is valued at £200 million.

In fourth place is Bowmer & Kirkland on the BCLive league table in April 2019 with a nine contract haul valued at a combined £274 million that included the month’s largest single contract. That contract, for Legal & General Group plc, is a £220 million project to deliver a new shopping centre at the Grosvenor Centre in Northampton.

Although London once again topped the regional table with a haul of 135 project valued at more than £1.47 billion, the Midlands ran the capital a close second with almost £1.3 billion. Key among those was a £183 million 42-storey, 481 apartment block in Birmingham’s Broad Street that helped propel the winning company – John Sisk – into fifth place.

Winvic Construction claimed seventh position with six new contract awards worth a combined £132.7 million that included a new build warehouse in Luton for client First Panattoni; while BAM Construction brought a little cheer to the education sector with a £70 million project to build a new social sciences building at the University of Sheffield’s Broomhill Campus.

Following a year in which the monthly total remained rooted stubbornly at the £4.0 billion for some 12 months, the current levels of new contract awards must surely constitute some kind of boom; and those that have been around the industry for as long as I have known what traditionally follows one of those.

But with each passing day, the industry continues to eschew such traditions. 

The industry is forging a new paradigm in which many of the accepted rules of peaks and troughs, seemingly, no longer apply. Whether that can be maintained post-Brexit remains to be seen. But for now, the UK construction industry is rewriting the rules.

Quick review of BCLive table for April 2019

- 478 no companies were detailed as winning new contracts during April 2019

- 766no new construction orders are detailed on BCLive

- Morgan Sindall Group secure overall top spot with £438.5 billion of new work

- New order winners in £1M to £5M category was Morgan Sindall Group with offices throughout the UK & the £1M and under category went to Engie Group.

- Morgan Sindall Group had the most number of new construction orders in the month with 26no.

No matter what the current industry trends are, ensure your business has access to all the construction tender opportunities relevant to you from across the UK. Become a member of the Builders’ Conference and enjoy hundreds of project leads delivered straight into your in-box every week www.buildersconference.co.uk/how-it-works

Sign up for latest news updates

Crest House19 Lewis RoadSuttonSurreySM14BR