New contract awards and tender opportunities fall more than 50%

The number of new contract awards are more than 50% lower than in May 2019, according to data from Builders’ Conference. Tender opportunities are also weakening and are 55% lower than the monthly average. The reduction in contracts awarded and tender opportunities reinforces the impact that the coronavirus crisis is having on the construction industry.

Pre-coronavirus between May 2019 and March 2020, the number of contracts awarded each month averaged 608. This fell to 524 contracts in April 2020 and just 359 contracts in May 2020. This is 41% below the average and a decrease of 52% compared to May 2019.

Following the spike in the value of contracts awarded in April 2020 due to two extremely large infrastructure contracts, the value awarded in May 2020 dropped by 60% to £3.9 billion. This is 35% lower than the monthly average of £6 billion between May 2019 and March 2020 and 24% below May 2019. Almost half of all the contracts awarded were housing projects (171 projects with a total value of £1.8 billion).

There was a slight increase in the number of tender opportunities available in May, compared to April. The number of projects open for tender increased by 16% from 272 in April to 312 in May. However, this is still 55% below the monthly average of 689 projects available for tender between May 2019 and March 2020 and 66% lower than May 2019.

Builders’ Conference indicated that there are just 156 tender opportunities available until the end of August 2020. The purchasing managers’ index for May pointed to a rapid drop in new orders received by UK construction companies, which was almost exclusively attributed to the coronavirus disease 2019 (COVID-19) pandemic.

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