Summer slowdown fears as latest contract award data droops

Grant Prior 3 years ago
Share

Contract awards and planning approvals in April were well below those seen in March according to the latest Snap Analysis from leading construction industry intelligence provider Barbour ABI.

Tom Hall, Chief Economist at Barbour ABI, said: “After a stellar performance for contract awards in March, activity was always likely to fall in April due to the Easter holidays and a new financial year, coupled with the high inherent volatility of the index.

“The question on everyone’s lips will be is this the start of a fall in sentiment before a full-blown recession in the summer?”

Barbour ABI’s Snap Analysis is a monthly look at the construction industry across all sectors with the data analysed at each stage of the pipeline – contract awards, planning approvals and planning applications – to give a robust picture of the short- and medium-term outlook for the industry across the UK.

Contract awards in April were at their lowest level since August 2021 and were down 33% on the previous month.

But contract awards have been hitting record highs recently and April was still above the long-term average at £5.8bn. The regular volatility of the index, together with the Easter break, could be the reason for the fall back in April, but it could also indicate a fall in sentiment preceding a summer recession.

The short-medium term outlook for construction is indicated by levels of planning applications receiving approval and April’s picture is a mixed one.

While the level of planning approvals is high overall, the picture is dominated by infrastructure development, especially wind farms. Commercial, hotel & leisure and education recorded very poor levels of planning approvals.

The medium-term picture is illustrated by the level of planning applications. The data for March, analysed in Barbour ABI’s May Snap Analysis indicates that although there may be a slump in activity in the summer, activity could pick up again in the third and fourth quarter of 2022. Overall, £12.3bn worth of planning applications were lodged in March.

Hall said: “One month does not make a trend, however the sharp falls in commercially sensitive sectors across contract awards and planning approvals, particularly for residential and offices will be cause for concern at the current time.

“On the flip side you could argue that in the face of high levels of uncertainty, the construction pipeline is continuing, at least currently.”

Get all the construction data and work-winning information you need

The Enquirer has introduced a new construction data page offering easy-to-access market intelligence to help your business.

Alongside interactive contracts leagues and daily tender invites, it helps you make informed business decisions with coverage of breaking economic news, latest workload and tender prices forecasts.

There is also a snapshot of current freelance labour rates and a guide to the best and worst payers within the major Tier 1 contractors.

For those looking to navigate the ever-changing world of contract and employment law, lawyers at Fenwick Elliot also give you the benefit of their expert insight.

And, of course, it’s all completely free for readers.

Click here to take a look.

Latest news

13-year-old becomes UK’s youngest qualified digger driver

Grandson of Gallagher Group chairman sets industry record
4 hours ago

Cubby reborn in £12m Svella-backed takeover

£50m revenue target set as 14 firms combine under new Cubby Group banner
19 hours ago

North East NHS trusts plot £3bn health estate overhaul

Market engagement begins for major construction push across four trusts
19 hours ago

HG goes green on cranes in £1.2m switch to battery power

Diesel-free crane drive cuts fuel bills by 94%
20 hours ago

Developer fined £165,000 for fire safety failings

Firm ignored fire safety orders on apartment job in Preston
20 hours ago

Bidding to start for £1.8bn North West framework

Contractors invited to bid for latest Procure Partnerships deal
20 hours ago

Hill hits record £90m profit as homes pipeline swells

Build-to-rent push and £4.8bn contracting book to fuel next growth phase
2 days ago

Rayner unveils £39bn plan to build 300,000 social homes

Council building revival and rent reform feature in social and affordable homes plan
2 days ago

Keltbray bounces back with £3.2m profit

Tighter controls and smarter project selection fuel strong turnaround
2 days ago

VINCI JV wins 500-home twin town centre revamps

Chester Northgate phase 2 and Northwich Weaver Square schemes move to delivery stage
2 days ago

80 energy projects unlocked as Ofgem backs grid expansion

£24bn energy networks deal gets green light from regulator
3 days ago

How to see your stories on the Enquirer

Join our Suppliers and Buyers directory to get your news published
2 days ago

Henley lands Midland Mill revamp on Leeds tower scheme

Restoration of 18th-century mill kicks off on South Bank regeneration project
2 days ago

New boss at Eric Wright Civil Engineering

Gavin Hulme takes top job as Diane Bourne moves to group role
2 days ago

Pinewood submits £1bn data centre plan

Studio giant adds green and learning spaces to tech hub blueprint
3 days ago

Record results after TClarke goes private

Britain's biggest M&E contractor flourishes after de-listing
3 days ago

Dalkia lands £200m nuclear maintenance deal

1,000 nuclear FM staff to join M&E contractor
3 days ago

Construction comeback to outpace wider economy

Arcadis forecast fueled by spending review optimism
4 days ago

First steel goes up on giant car battery site

Severfield gets to work on McAlpine Somerset site
4 days ago

Permasteelisa wins cladding deal on Bovis city tower

Facade specialist lands package at 60 Gracechurch Street
3 days ago

Fox buys recycled asphalt specialist Fisher

Acquisition adds major recycled asphalt capacity in north west
4 days ago

Major Building Safety Regulator shake-up to end tower delays

HSE stripped of control and top fire chiefs brought in to fast-track stalled schemes
4 days ago

Hinkley trio sign Sizewell civils deal

Balfour,Bouygues and Laing O'Rourke form Civil Works Alliance for new power station
4 days ago

£3.9bn data centre plan for Ravenscraig steelworks

Green energy to power massive new steel to silicon AI campus
4 days ago

Breakthrough on HS2’s second longest tunnel

8.4 mile Northolt to Old Oak Common drive completes
4 days ago

Neilcott on fast-track to debt-free employee ownership

£22.5m loan nearly paid down after big profit year
4 days ago

TfL kicks off race for £700m Tube station upgrade

South Kensington and Elephant & Castle top the pipeline list
4 days ago

Corbyn Plant Hire fleet goes under the hammer

Kit to be sold off by sister firm to collapsed groundworks contractor
4 days ago

Government wields procurement stick on late payment

New rules would block slow payers from bidding on big public jobs
7 days ago

Hercules buys power line labour firm for £15.7m

Labour supply specialist snaps up Advantage NRG to tap booming electricity upgrade market
7 days ago