The latest information from Builders’ Conference shows that construction activity suffered a setback in September after a buoyant August. The National Mourning period following the death of Her Majesty Queen Elizabeth II, together with the Government’s Growth Plan 2022 which caused turmoil in the financial markets, saw the value of contracts fall to its lowest level for more than two years when the country was in its first COVID-19 national lockdown. There was also a dip in the number of contracts and the industry will be hoping that the Chancellor’s pledge to ‘get Britain building’, which will include accelerating 138 major infrastructure projects, will provide a welcome boost in activity over the coming months.
Dip in Number of Contracts
The number of contracts awarded in September was 422, which is 8% down on August (460). However, it is just above the monthly average over the last year (405), which has seen a number of swings due to the war in Ukraine, changes in Government and soaring inflation.
Value of Contracts Plunges
The value of contracts awarded in September was just £3.8 billion. This is a 39% decrease compared to August (£6.2 billion) and 32% below the monthly average over the last year (£5.6 billion). It is also the lowest value recorded since June 2020 (£3.6 billion) when the country was still in lockdown due to the COVID-19 pandemic.
It was another strong month for the public sector, which accounted for 38% of all contracts awarded by value, including 13 road projects totalling £462 million and 79 education projects worth £377 million. In the private sector, there were 122 housing projects worth £1.4 billion (37%), 54 office projects totalling £365 million (9%), and 15 industrial projects worth £211 million (5%).
England dominated with 94% of the value. London accounted for 29% of the total, followed by the Midlands with 24% and then the North West and Yorkshire with 8% each.
Lack of Tender Opportunities
The number of tender opportunities available in September was 297. This is consistent with August (301) but 50% below the monthly average of 592 projects available for tender between September 2021 and August 2022.
At present, there are only 186 tender opportunities available until the end of December 2022, according to Builders’ Conference.
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