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Contract awards drop by 14%

January 15, 2024
in General
Contract awards drop by 14%
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Latest research from construction analysts Barbour ABI shows sectors hit hardest were residential housebuilding down 14%, commercial developments down 15% and hotel and leisure falling by 29%.

A lack of confidence in the market was also reflected in applications for new construction projects, which fell by 16% to under £100bn. Housing applications are now 21% down on pre-pandemic levels.

Barbour Consulting Economist Kelly Forrest said: “2023 was challenging for the UK construction sector. In addition to viability challenges from higher construction costs and borrowing rates, consumers and business confidence remained weak.

“2023’s good news stories were largely confined to the public sector as the government’s flagship school and hospital building programmes finally started to build some momentum amid moderating cost inflation and mounting political pressure.”

Barbour ABI found that education awards bounced back to £6.1bn in 2023, a 20% uplift compared with 2022, and a 19% increase from 2019. Healthcare beat 2022 by 4% and is now 160% higher than pre-pandemic levels.

Forrest added: “Overall weakness concealed pockets of buoyant sub-sector activity. Energy was a particular bright spot as investment poured into energy from waste and energy storage facilities, along with offshore wind.

“In early 2024 there are a few reasons to be optimistic. Interest rates are likely to have peaked and inflationary pressures have eased markedly. Entering what is very likely to be an election year there is a risk there will be a hiatus in public sector investment as key decisions are postponed. The speed and resilience of the private sector recovery will be pivotal.”

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : ConstructionEnquirer – https://www.constructionenquirer.com/2024/01/15/contract-awards-drop-by-14/

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