The value of residential construction contracts awarded in the UK has grown by more than 90 per cent in the last 12 months, according to a report released today. Totalling £1.89 billion, the value for projects in this sector for November is 2 per cent down on last month, but 92.2 per cent up on November 2012.
The construction industry overall saw growth of 6.8 per cent from October to November 2013, with a 56.5 per cent increase on the value recorded in November 2012.
These latest figures, taken from Barbour ABI’s Economic and Construction Market Review, also highlight marked growth in the UK’s infrastructure construction sector which grew by 16.2 per cent last month compared to October 2013.
On the findings of the report, Michael Dall, lead economist at Barbour ABI, commented:
“The figures show an indication of significant upturn in construction activity in the UK. It’s unsurprising that the residential sector is leading the way, and the substantial 92 per cent rise in value and 70 per cent rise in number of contracts on last year is telling of the sharp rise in activity the sector has experienced over the last 12 months, boosted by the Government’s Help to Buy initiative and renewed confidence from the major house builders.
“In addition to the healthy figures from the residential sector, which accounted for 27 per cent of the total value of construction projects awarded in November, Barbour ABI data showed that the infrastructure sector had a strong month – accounting for 37 per cent of projects awarded for the month. This is largely attributable to two large Siemens projects to develop gas fired power plants in Spalding, Essex and Coryton, East Midlands. Infrastructure is a major contributor to construction so this is good news for future growth of the industry.
“Risks from the Eurozone are ever present, with growth weak and the risk of deflation in some countries remaining. It is our view that the near term outlook for the UK economy has improved but there are still underlying weaknesses, such as worker productivity and low levels of business investment which will continue to prove a drag on the scale and durability of economic growth in the coming years. As we head into 2014, these areas will need to be closely watched as they will have a major impact on the economic growth potential for the UK.”
As well as highlighting key sub-sector trends within the construction industry, data posted also identified regional variations in overall construction performance. Last month, London and the East of England were the most prominent regions, each accounting for 17 per cent of all contracts awarded. The East Midlands and the North West were a joint second, with both securing 12 per cent of works.
The Economic and Construction Market Review is a monthly report designed to give valuable, current insight into UK construction industry performance. The Review is compiled from Barbour ABI’s records of construction data for every UK planning application, and key indicators, such as the Office for National Statistics’ Construction New Orders data.
The Economic and Construction Market Review will be published monthly and is available to download at http://bit.ly/1eq2IZK