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News » UK » Average contract values rise 18% » published 22 Jan 2016

Average contract values rise 18%

A raft of ‘mega projects’ helped drive a £10bn rise in the value of construction contracts awarded in the UK in 2015.

According to data gathered by Barbour ABI, the value of total construction contracts awarded in the UK last year reached £74bn, up 16% from 2014's total of £64bn.

However, there was a 4.7% decrease in number of contracts awarded that Barbour ABI recorded, from 12,440 in 2014 to 11,857 in 2015. This resulted in the average construction project value increasing by 18% to £6.2m for the year.

An example of some of the large projects commissioned in 2015 include the £1.3bn Rampion offshore wind farm, the £1bn Thames Tideway Tunnel and a £330m extension of Walney offshore wind farm. The infrastructure industry had a bumper year, increasing its total contract value by 47% to £18.9bn.

Barbour ABI lead economist Michael Dall said: “The return of the ‘higher value project’ has certainly been one of the biggest focal points for construction in 2015. Confidence seems to have returned for many of the larger companies within the industry, who must have felt that the time was right in 2015 to start commissioning mega projects that should provide a boost to the industry for years to come.

“It’s also clear that the number of large offshore wind farm projects has had a major effect on the infrastructure sector and its success last year, boosting construction in general with a major increase in contract value.

“However, the question remains as to whether the construction industry has the supply, principally skilled labour, to deliver on these contracts awarded in the timescales envisioned. Solving these supply side problems will be critical for constructions prospects in 2016 and beyond.”

 

 

Year

Overall construction value

2013

£62 billion

2014

£64 billion

2015

£74 billion

   

Year

Total construction contracts

2013

11,271

2014

12,440

2015

11,857

   

Year

Average construction project value

2013

£5.5 million

2014

£5.1 million

2015

£6.2 million

 

 

MPU

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This article was published on 22 Jan 2016 (last updated on 22 Jan 2016).

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