Total value of new contract awards continues to recover
The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI, has revealed that the total value of construction contract awards in July 2020 was £6.3 billion which compares to £3.1 billion in June and £1.6 billion in May.
The number of awards has also increased in July to 860 which is an increase of 80.3% on June. The residential and infrastructure sectors accounted for over 50% share of total contract awards.
Every sector had at least 33% growth in July, compared to June, with up to 98% growth in certain sectors. The residential sector contract awards increased by 65.9% on June, Infrastructure climbed 75.4% and education contract awards increased by 43.5%.
London was the leading region in July accounting for 18.5% of awards. The second largest region was Scotland with attributable share of 17.1% and was followed by the South East with a 12.8% share of awards.
The UK construction sector in August 2020 is on the path to recovery with output for May and June showing some bounce back. In addition, contract awards data for June and July is extremely positive indicating that the 51.1% slump in new orders in Q2 might be allayed to some extent in Q3.
Despite the positive move in orders there are winds of concern as development plans change and pricing pressure on the supply chain grows.
In terms of construction employment the number of people employed in construction fell by 83,000 in Q2 and whilst many organisations are bringing people back from furlough some of the larger construction and housebuilding organisations have indicated that they will have to cut employee numbers in 2020.
Tom Hall, Chief Economist at Barbour ABI and AMA Research said, “While the economy entered a recession, the construction industry has seen significant increases in activity over the last two months. This could potentially be due to the restarting of activity that had stalled in previous months. A strong planning pipeline could suggest the industry will continue to strengthen but at what rate remains to be seen.”
Download the full report here: http://ubm.io/2FRLrwm
