New contract awards plummet
In the first full month since the UK voted to leave the European Union, the value of new construction contract awards collapsed by more than a third on the previous month and by more than a half on the same month a year before.
According to the latest statistics collated by the Builders’ Conference, contract awards during July 2016 were down 15% in number and 35% by value compared to June 2016.
And compared to July 2015, the value of new contracts was down 55% year-on-year. Neil Edwards, chief executive of the Builders' Conference, described the decline as 'staggering'.
This time last year, the Builders’ Conference BCLive league table’s rolling year cumulative total was riding high at an unprecedented £56bn. Today, that rolling year figure is down by 18% at £46 billion.
According to Builders’ Conference data, the total value of new construction orders signed off in July 2016 was just £2,944m. The previous month it was £4,543m. In July 2015 it was £6,631m.
"As the industry winds down for its summer holidays, many among its ranks will not have the benefit of some hard-earned rest and recuperation," Neil Edwards said. "Instead, they will be worrying just what they will be coming back to when that holiday is over."
Top of the BCLive league table for July 2016 was Balfour Beatty, which picked up six new contracts with a combined value of £314.3m. The largest of these was a £170m contract to upgrade baggage handling facilities at Heathrow Airport.
In second place was Morgan Sindall, which picked up £123m-worth of new business from 23 individual separate contracts. Morgan Sindall’s largest contract in the month was a £15m order booked by subsidiary Overbury to fit out the Royal Bank of Scotland’s Islington offices.
Keepmoat claimed the number three position on the BCLive league table with £130.2m of orders, including a £50m contract from Great Places Housing Group.
However, the story could have been very different had EDF Energy been allowed to sign construction contracts for the proposed Hinkley Point C nuclear power station. Contract signings nearly took place on 29th July but the government put the brakes on.
Contracts that were nearly signed in July include the £2bn civil engineering contract for Hinkley Point C, earmarked since 2012 for Bouygues Travaux Publics/Laing O’Rourke joint venture (BYLOR).
Then there is the £460m electrical package lined up for for Balfour Beatty/NG Bailey and a further £840m of business for other Hinkley Point C works packages.
If new prime minister Theresa May had not decided to intervene and block the nuclear project pending a further review , July 2106’s new contract awards total would have been more than double its actual total, topping £6bn.
BCLive Top 20 for July 2016
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This article was published on 2 Aug 2016 (last updated on 3 Aug 2016).