In November year on year contract value for construction decreased by 30%. This is according to Barbour ABI’s December edition of the Economic and Construction Market Review.
The report indicates that total construction value in November reached £5.5 billion, reverting back to the same total in August that occurred following the Brexit vote. Major sectors, including residential, commercial, retail and infrastructure, struggled to gain momentum.
Even with a lackluster November, the residential sector continued to lead all sectors with £2.1 billion worth of construction contracts and 79% of the value coming from private housing investment. It was London and the North East that led all regions, each with 15% of the contract total value. The North East’s rise in November was aided by the commissioning of the Tees renewable energy plant in Cleveland, worth £650 million.
Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “The number of construction projects in November were at the lowest point since December 2015 but the total contract value remained stable in comparison to the rest of 2016, indicating that larger projects are still being commissioned, making up for the lack of overall contracts. When comparing October and November to last year’s figures, the industry is vastly behind where it was at that time, with anxiety over the Brexit and future political decisions the most likely probable cause for the drop off.”
“The industry is still relying heavily on the residential sector to bring in a large proportion of contract value, putting too much reliance on the sector to perform month after month. Other major sectors such as infrastructure and commercial & retail will need to see an increase in construction contracts and value if construction is to have a positive turnaround in 2017.”
Read the article online at: https://www.worldcement.com/europe-cis/15122016/barbour-abi-reports-disappointing-november/