Value of the construction industry rockets
Published: 28 January, 2014
The value of construction projects in the UK has increased by 67.1% in the last year, according to Barbour ABI’s recent Economic & Construction Market Review.
The report, published last week (23 January), shows that new project contracts awarded in December 2013 totalled £6bn, compared to £3.6bn in December 2012. The infrastructure sector proved to be an area of significant growth, with the total value of projects awarded reaching £2.2bn – a 10.6% increase from November 2013 and a 101.6% year-on-year growth.
The figures also highlight sustained growth in the residential construction sector. The total contract value for December in this sector grew by 88.2% year-on-year.
Michael Dall, lead economist at Barbour ABI, said: “Residential construction remained strong throughout the latter half of 2013 and has truly spurred the growth of the industry. For the most part, the increase in residential activity can be attributed to the government’s Help to Buy scheme, but there are concerns that demand created by such schemes will surpass the rate of housebuilding. This is a topic that will be the source of major debate over the next 12 months in the lead up to the 2015 elections.
“The performance of infrastructure as a sub-sector is also incredibly encouraging. The figures are a reflection of an exciting year of renewed optimism for the construction industry and, as a major contributor to figures for the industry as a whole, the sustained period of strong project values in this sector is good news and a key indicator for future growth.
“The National Infrastructure Plan, as published by the government on 4 December 2013, updated the top 40 infrastructure projects in the pipeline for the UK, outlining a pathway for potential growth. An increase in new orders data recorded by Barbour ABI encourages me to suggest that the sector does have strong growth potential this year.”
Data in the report also identifies regional variations in overall construction performance. Last month, Wales took the lead as the most prominent area, accounting for 19% of the UK total. London accounted for 18% of all contracts awarded, while Yorkshire and the Humber and the South East were not too far behind, accounting for 13% and 12% of the total, respectively.