LONDON, February 18, 2016 /PRNewswire/ --
The construction sector has had a slow start to 2016, with contract values for January dipping to £5.3 billion, a decrease of 9 per cent on the month and a more substantial reduction of 33 per cent when compared to November 2015.
According to the latest Economic & Construction Market Review from industry analysts Barbour ABI, the residential sector led the construction industry with a total contract value of £1.4 billion in January. This was somewhat surprising considering residential contract values dipped by 36 per cent compared to the previous month, based on a three month rolling average (see figure 1.1).
Looking across other sectors within the industry, the appetite for new offices continues to attract investment as they dominated the commercial & retail sector with 80% of the total contract value. This was worth just under £800 million and was greatly helped by the recently commissioned 22 Bishopsgate office scheme in London worth over £500 million. Regionally, Wales received a major economic boost, as the Hitachi led Wylfa power station in Anglesey was agreed in a £450 million deal, a coup for the region and the infrastructure sector.
Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: "Whilst January was a relatively slow start for construction in terms of contract value, the industry pipeline is relatively strong and I'm expecting to see a flurry of £100 million plus projects to get agreed over the coming months. I see private housing and infrastructure as the bright lights of the sector for 2016."
"However the industry does need to be wary of a growing trend of major contractors not being able to agree a final price with clients, largely due to cost inflation and skills shortages. It is an indication of the difficulties the industry could face in the future as demand seems to be holding strong but increasing costs could potentially affect the sector's ability to deliver."
Notes to editors:
About Barbour ABI:
Barbour ABI is a leading provider of construction intelligence services. With a team of in-house research specialists and a dedicated lead economist, it provides commercially relevant insight and unique analysis of trends and developments within the building and construction industry.
Barbour ABI is the chosen provider of Construction New Orders data to the Office for National Statistics and the Government's Construction and Infrastructure Pipeline, outlining future construction and infrastructure projects where public funding is agreed. Barbour ABI also provides data for independent organisations, such as the Construction Products Association.
Barbour ABI is part of global events-led marketing services and communications company, UBM, and is headquartered in Cheshire Oaks, Cheshire.
UBM helps businesses do business, bringing the world's buyers and sellers together at events and online, as well as producing and distributing news and specialist content. Its 5,500 staff in more than 30 countries are organised into expert teams which serve commercial and professional communities, helping them to do business and their markets to work effectively and efficiently.
Press enquiries to:
Jonathan Touhey at Barbour ABI
SOURCE Barbour ABI