Slight drop in value of contract awards in October but activity remains strong, says Barbour ABI

The total value of construction contract awards in October 2020 was GBP4.9 billion based on a three-month rolling average. This is a decrease of 9.4 per cent on September and follows three consecutive months of good growth. Annual comparisons show it as 1.1 per cent lower than for October 2019.

In the three months to October 2020, total contract awards were valued at GBP14.7 billion which is 75.7 per cent higher than for the previous quarter and is also 1.3 per cent higher than for the comparable quarter ending October 2019. There was an increase of 8.7 per cent for contract award numbers this month at 871 compared to September. Annual comparisons show marginal (0.8 per cent) improvement.

The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI, highlights levels of construction contract values awarded across Great Britain.

The North West was the leading region in October with 19.8 per cent of awards and a total of 120 projects. The second largest region was London with value share of 13.8 per cent, whilst tying for third place was the East of England and Scotland both with 11.1 per cent of awards.

Analysis by sector indicates that residential maintained lead status in October accounting for 36.8 per cent of awards. Underpinned by some major civils awards, infrastructure was the second largest region this month with 22.2 per cent of awards and 131 projects.
   
Tom Hall, Chief Economist at Barbour ABI and AMA Research says: “The value of contract awards decreased from GBP5.4 billion in September to GBP4.9 billion in October but the number of awards continued to increase month on month. It is encouraging that since coming out of the first UK-wide lockdown, contract awards remain at long-term average levels. While there remain many downside risks, more positive news has emerged over the last month, not least construction sites staying open over the second lockdown plus positive vaccine trials. We therefore have a greater level of confidence that activity will be maintained over the short term.”