Builders Conference Build UK: Decline in Construction Activity

The latest information from Builders’ Conference shows a reduction in both the number and value of contracts in April. The number of contracts fell to its lowest level in more than five years and the total value was down on the first three months of this year despite the awarding of a number of large infrastructure projects. Whilst it may be a blip due to the Easter holidays, there will be concerns that it could mark the start of a downward trend caused by high cost inflation and widespread labour and material shortages.

Number of Contracts Falls

The number of contracts awarded in April was 318, a 35% decrease compared to March (490) and the lowest monthly total since December 2017. It is also 31% lower than the monthly average over the last year (461) and 42% down on last April (548).

Dip in Value of Contracts

The value of contracts awarded in April was £5.2 billion. Thanks to four large infrastructure projects worth a combined £1.9 billion, this is only 10% down on the previous month as well as the monthly average over the last year (both £5.8 billion). It was also just 11% lower than April 2021 (£5.7 billion).

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57% of all contracts awarded by value were in the private sector. Overall, there were 19 road projects worth £2.1 billion (41%); 90 housing projects totalling £1.1 billion (22%); and 30 office projects worth £276 million (5%).

England recorded 65% of the total value, with Scotland representing a signficant 29% thanks to two contracts worth a total of £1.3 billion for maintenance work on the A96 Trunk Road from Inverness to Aberdeen. Wales accounted for 5% of the total value and Northern Ireland 1%.

Tender Opportunities Remain Scarce

The number of tender opportunities available in April was 325. This is a 9% decrease compared to March (359) and 46% below the monthly average of 605 projects available for tender between April 2021 and March 2022.

At present, there are just 190 tender opportunities available until the end of July 2022, according to Builders’ Conference.

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