The latest information from Builders’ Conference shows an increase in the number of contracts awarded in May but a reduction in their overall value. Whilst the number of contracts recovered from the previous month in line with the monthly average over the last year, the total value was down again reaching its lowest level this year. With the industry facing inflationary pressures not seen in the UK for 40 years, there will be concerns about the impact on the construction supply chain over the coming months.
Increase in Number of Contracts
The number of contracts awarded in May was 432, a 36% increase compared to April (318). It was consistent with the monthly average of 442 contracts over the last year but 22% down compared to last May (551).
Value of Contracts Falls Again
The value of contracts awarded in May was £4.7 billion, which is 10% down on the previous month (£5.2 billion) and well below the monthly average over the last year (£5.7 billion). It was also 25% lower than May 2021 (£6.3 billion) but this included a number of large housebuilding and rail projects, making it difficult to draw a comparison across the two years.
69% of all contracts awarded by value were in the private sector. Overall, there were 131 housing projects totalling £1.2 billion (26%); 24 entertainment projects worth £544 million (12%), the largest of which was a £400 million contract to expand Shepperton Studios in Surrey; and 60 office projects worth £498 million (11%).
England accounted for 94% of the total value, although London (£805 million) was outperformed for the first time in more than four years by the Midlands, which delivered a total of £814 million, including a £259 million contract for a new British Army vehicle storage facility in Gloucestershire.
Lack of Tender Opportunities
The number of tender opportunities available in May was 305. This is a 6% decrease compared to April (325) and 47% below the monthly average of 572 projects available for tender between May 2021 and April 2022.
At present, there are just 176 tender opportunities available until the end of August 2022, according to Builders’ Conference.
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