The construction sector has had a slow start to 2016, with contract values for January dipping to £5.3 billion, a decrease of 9 per cent on the month and a more substantial reduction of 33 per cent when compared to November 2015.
According to the latest Economic & Construction Market Review from industry analysts Barbour ABI, the residential sector led the construction industry with a total contract value of £1.4 billion in January. This was somewhat surprising considering residential contract values dipped by 36 per cent compared to the previous month, based on a three month rolling average (see figure 1.1).
Looking across other sectors within the industry, the appetite for new offices continues to attract investment as they dominated the commercial & retail sector with 80 per cent of the total contract value. This was worth just under £800 million and was greatly helped by the recently commissioned 22 Bishopsgate office scheme in London worth over £500 million. Regionally, Wales received a major economic boost, as the Hitachi led Wylfa power station in Anglesey was agreed in a £450 million deal, a coup for the region and the infrastructure sector.
Michael Dall, lead economist at Barbour ABI, said: “Whilst January was a relatively slow start for construction in terms of contract value, the industry pipeline is relatively strong and I’m expecting to see a flurry of £100 million plus projects to get agreed over the coming months. I see private housing and infrastructure as the bright lights of the sector for 2016.”