Construction activity rose to pre-Christmas levels last month, after a sharp drop in February due to the bad weather, according to a report released today.

Barbour ABI’s latest Economic & Construction Market Review revealed that, with the value of contracts awarded worth £5.2bn in March – an increase of 7.2% on the month before – experts are hopeful it will put the industry back on an upward trajectory.

The report also highlighted the following findings:

  • Residential construction is still the most dominant type of contract awarded in the UK, accounting for more than a third of the total contracts by value
  • Only two of the past 12 months have seen residential construction take a slice less than 30% – a sign that housebuilding continues to drive the industry’s long-term recovery
  • London has a hold on the market, resulting in a disproportionate share of contracts awarded. The capital accounts for more than a quarter of the total value, but only 14% of the projects by quantity. Five of the top 10 most valuable contracts were located in the city, such as the new £150m Crossrail maintenance contract, two large office schemes including the 2.3 acre development at Rathbone Place, and two large residential schemes including the 737 housing units at Nine Elms Point, worth £73.7m.

Michael Dall, lead economist at Barbour ABI, said: “All the indicators pointed towards a poor month for construction in February, with the severe weather possibly forcing contractors to put work on hold and new projects unable to commence.

“Therefore it’s positive to see that activity has picked up again in March, with a healthy 7.2% rise on the month before. This is backed up by the latest ONS construction output data, which showed construction output in the first two months of the year at 4% higher than a year ago and growth forecasts for 2014 revised up to 4.5%.

“It’s clear that the continued strong performance of private housing and upturn in wider infrastructure has aided the upturn in this month’s figures, but necessary repair works and flood defence projects will have played a significant part too.

“Looking ahead, business indicators and official survey data all point to plenty of momentum in the economy and growing confidence, which is great news for the construction industry.”