The value of infrastructure contracts increased by almost 90% year on year in July, according to a recent report by Barbour ABI.

The latest Economic & Construction Market Review shows the contract values awarded reached £2bn, based on a three month rolling average.

The figure is almost 90% higher than July 2014 and the largest total for more than 18 months.

The two largest infrastructure contracts awarded were a £250m extension to the Burbo Bank offshore wind farm and a Beddington-based 'energy from waste' facility worth £200m.

Both schemes are renewable energy projects.

Overall for construction, infrastructure had the highest proportion of contracts awarded by value with 27% of the total.

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The residential sector was second to infrastructure with 26% of total contract value.

From a regional perspective, the North West dominated infrastructure for the month, with 32% of all contract values and an increase of almost 25% in activity when compared to July 2014.

The Burbo Bank project and the £130m M6 motorway junction 16-19 development helped to increase the figure 'significantly'.

Michael Dall, Lead Economist at Barbour ABI, said: "Over the last five months, continued spending on road projects and the growing amount of renewable energy contracts has propelled infrastructure to become the top performing sector in construction for July. It is evidence that the projects proposed by the Government are starting to have an impact on the construction industry, though it is important that these move from contractor appointed to spades in the ground for the full effect to be realised."

"However, construction is still lagging behind its pre-recession peak by 3.2%, which compared to service sector growth of 9.2% exemplifies the scale and challenge of rebalancing the economy.

"The commissioning of the large scale infrastructure projects that we have seen in July is encouraging but this momentum must continue to ensure growth is sustained."

(LM)