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UK construction news: July 2014

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Barbour ABI has published its latest Economic & Construction Market Review, which includes data from the industrial, educational and residential construction sectors for July 2014.

Industrial construction

According to Barbour ABI data, the value of industrial construction contracts across the East of England totalled more than £180 million in July, which accounts for 44.4% of the overall contracts awarded for the sector UK-wide. This represents an increase of 40.2% compared to July 2013.

The region also accounted for 11% of the total value of construction contracts awarded across all sectors in July, behind London and the South East (15% each) and the North West (12%).

Michael Dall, Lead Economist at Barbour ABI, noted: “Industrial construction activity in July was at its highest since Christmas, and the East of England was right at the forefront of this growth. This is largely down to the award of a £140 million contract for the 240-acre Gateway Park Distribution Park in Peterborough, which is set to bring more than 8000 jobs to the local area.

“Warehouse and storage projects were the most predominant in the industrial sector last month, accounting for 58% of contract value in July, and this doesn’t look set to change as long as sites, such as the one in Peterborough, are still ripe for development.”

Educational construction

Education construction activity reached its highest level in two years, accounting for 15% of the total value of all construction contracts in July. Barbour ABI data revealed that the value of education construction contracts totalled more than £714 million in July, a 17.4% increase compared to June 2014 and 25.1% higher than July 2013.

London was the main region for education construction activity in July, accounting for 15.1% of the total value of projects. This is largely due to the award of two large ticket contracts, one for Whitefriars Community School and the other for the expansion of Wembley High Technology College, valued at £20 million and £11 million respectively.

“Education construction was boosted by further and higher education projects in July, which accounted for more than a third of contract values,” said Dall. “State secondary schools were the other major type of project accounting for 29% of contract value - an increase of 12% on the corresponding month last year.

“Looking ahead, a number of measures announced by the government in this year’s Budget will impact the value of contracts awarded in the coming years, including £106 million set aside over five years to fund around 20 additional Centres for Doctoral Training, plus an additional £85 million over the next two years to extend the Apprenticeship Grant for Employers scheme,” Dall continued.


Finally, residential construction accounted for more than a third of the total value of contracts awarded in July, on the back of record-breaking profit reports from some of the UK’s biggest housebuilders. The residential sector had the highest proportion of contracts awarded by value in July, with 37% of the total – an increase of 7% on the previous month.

The value of all new construction contracts awarded in July totalled £5.1 billion – a slight decrease of 3.2% compared to June. However, construction levels were 6.2% higher than the value recorded in July last year, which economists suggest is further evidence of the industry’s improving performance over the long-term.

“With output in the construction industry flat over the last quarter, mainly due to a very poor month in May, it’s encouraging to see residential construction sustaining the industry going forward,” Dall commented. “However, growth in other key sectors such as commercial and infrastructure will also need to improve if the industry is to surpass its pre-recession size sooner rather than later.”

Adapted from press release by Rosalie Starling

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