Contract awards return to above historical levels

Grant Prior 2 weeks ago
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Contract awards increased by 22% in March compared to February to £5.8 billion. The main change in activity  was a very large increase in the hotel and leisure sector.

The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI, highlights levels  of construction contract values awarded across Great Britain.

Sector analysis shows that Residential contract awards remained stable in March at historical average levels, after  picking up in February. Activity was £2.0 billion in the month, compared to £1.9 billion in February and £1.6 billion in  January. Over 2020, residential contract awards averaged £1.7 billion.

The hotel and leisure sector contract awards value reached £1.0 billion in March as the planning approvals activity we  reported in December and January converted to contract awards.

Commenting on the figures, Tom Hall, Chief Economist at Barbour ABI and AMA Research said, “After a weak recovery  over the second half of 2020 and the beginning of 2021, March saw a definite improvement across the planning  environment. Importantly increases were seen in the commercially sensitive sectors of hotel and leisure in contract  awards, and residential and commercial in planning approvals.

“However, this is only one month of improvement and the planning environment is notoriously volatile. The catch-up  of “lost” contract awards since the start of the pandemic amounts to some £15bn of projects, or around 20-25% of  the annual contract award value. We would therefore expect a significant amount of catch up over the next couple of  months as the economy reopens to strengthen a currently weak construction pipeline.

“All things equal this is some much-needed positive news for the sector after an exceptionally challenging 12 months.”

Download the full report here.

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