Has the construction industry been affected by Brexit’s “creeping paralysis”?
The value of all construction contract awards in September 2019 was £4.7 billion based on a three-month rolling average, which is a decrease of 2.5% on August, and a decrease of 15.6% when compared to September 2018.
Both the number of contract awards and the values have dropped in August and September. June and July were both positive months, but saw values held up by a few big-ticket projects. The total number of contract awards in September was 706, which is 6.1% lower than August and 30.2% lower than July 2019.
The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI, highlights levels of construction contract values awarded across Great Britain. The recent decline in project awards points towards a cautious industry waiting for the Brexit deadline of the 31st October to determine its future planning.
The two largest project awards in September were both publicly funded road developments awarded by Highways England. In the South West, this was the dualling of the A303 between Sparkford and Ilchester in Somerset and in the East of England, improvements to the A47 including the provision of a dual carriageway between North Tuddenham and Easton in Norwich.
Rebecca Larkin, Senior Economist at the Construction Products Association commented, “The impacts are most striking in privately-financed construction, where a lack of commercial projects in the top ten highlights how the current political and economic uncertainty is stifling business and investor confidence and reducing the pipeline of offices and retail developments across Great Britain.”
Commenting on the figures, Tom Hall, Chief Economist at Barbour ABI and AMA Research said, “This week has seen intense political debate in Parliament following the announcement that the UK Government and the EU have agreed upon a Brexit deal. With no clear decision on Brexit, this is inevitably impacting the construction industry, while uncertainty remains, so will caution.”