The industry analysts' latest Economic & Construction Market Review highlights the levels of contract values awarded in October across all regions of Great Britain.
Despite a positive summer start with more than £7 billion of housing contracts awarded between June and August, the sector experienced a slowdown in October with figures declining 10% and falling for the second month in a row.
The overall contract value for October was £7.1bn based on a three month rolling average, a small increase on September but the highest total monthly construction figure for almost two years. However, large HS2 contracts commissioned in September worth £7.2 billion alone are helping to mask the slide in housing construction contract value.
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Elsewhere, Barbour stated it was a "mixed bag" for various sectors in October, with industrial and medical & health construction joining housing as sectors that saw a drop in contract value, at 16.2% and 9.9% respectively. However, infrastructure, commercial & retail and education all saw slight increases on the month and hotel, leisure & sport construction saw a major increase in monthly contract value of more than 50%.
The highest value project in October was the 1-5 Grosvenor Place – Belgravia. The scheme is valued at £500 million, more than three times the value of the second highest placed project, 340 flats & commercial units on Portugal Street in Manchester. Overall, 53% of the value from the top 10 biggest projects was located in London.
Michael Dall, Lead Economist at Barbour ABI, said: "It's evident that the major HS2 projects commissioned in September are masking an underlying softening of activity in certain sectors of construction such as housebuilding. Housing has been driving overall industry growth across 2016 and parts of 2017 as infrastructure lagged behind but is now flagging. Without the HS2 developments we would be looking at a much bleaker picture in our results for October."
(LM)
