Infrastructure construction contracts peaked to unprecedented levels in March hitting £1.6 billion in value and 90% higher than those awarded in the same period last year, according to figures released today (24 April 2015).
The award of two major contracts including the M4 Corridor project surrounding Newport and the A5-M1 Link at Dunstable, collectively valued at £967 million, during the month indicates that the Government’s promised investment in road infrastructure is beginning to come to fruition.
The industrial sector also posted a strong performance with contract values during March equating to £627 million representing a 104.7% increase on those in March 2014.
Increased demand for manufacturing and warehousing has helped drive the uplift in industrial activity with £70 million of contracts awarded in the North West for Project Perch at Wirral Waters and a BAE Logistics facility in Barrow-in-Furness. Warehouse and storage dominated accounting for 36% of all contract types awarded last month.
The total value of contracts awarded in both sectors during March, £1.633 billion, provides a significant boost to the construction sector which shrunk unexpectedly during quarter one of 2015.
Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “Private housing contracts have fuelled the construction sector’s journey of growth to date but we risk stalling if the balance is not re-established across multiple industries.
“The boom in works within infrastructure and industrial operations doesn’t just spell good news for construction but for the economy as a whole which is now benefitting from a greater range of investment as confidence grows and spend diversifies.”
The report by Barbour ABI, which supplies construction data to the Office for National Statistics (ONS), Cabinet Office and Treasury, also noted that macro-economic growth is outperforming figures forecast in the most recent Autumn Statement and 2015 Budget.
￼Michael added: “Regardless of month-to-month results, the industry is in good shape and our data proves that construction is performing well. As quarter two begins we stand to see pre-recession levels return by 2017.”
These latest figures are taken from the Barbour ABI Economic & Construction Market Review, a monthly report designed to give valuable insight into UK construction industry performance. It is compiled from Barbour ABI’s records of construction data for every UK planning application, and key indicators, such as the Office for National Statistics’ Construction New Orders data.