Contract awards sink to nine-month low

The value of new work awarded to contractors has hit its lowest level since summer 2021, according to research.

Analysis by construction insight specialist Barbour ABI showed that £5.8bn of contracts were handed out by clients in the sector in April. This was 33 per cent lower than in March and represented the smallest total since August 2021.

Commercial and retail awards were the most suppressed, falling by 75 per cent in a single month to £300m in April. The value of education construction contracts plummeted by 51 per cent to £200m.

Infrastructure and residential deals were also down on previous figures, but there was better news for firms working in the leisure sector, where new agreements increased by 177 per cent.

There were also positive signs further back in the construction pipeline, with the value of schemes receiving planning approval up by 20 per cent in April.

However, this was largely due to three massive offshore wind farms being given the green light, with infrastructure consents up by a whopping 264 per cent to £5.6bn. All other sectors saw a drop-off in the financial worth of schemes approved.

Looking even further back, applications grew by 55 per cent in April, with £12.3bn of potential projects being put in front of planning authorities last month.

The largest chunk of these was residential, at £4.8bn, followed by £3.7bn of infrastructure schemes and £2.2bn of industrial proposals, according to Barbour ABI.

Fellow industry intelligence provider Glenigan last month found that contract awards dropped by 9 per cent in the first quarter of 2022. Its report said major contracts felt the brunt of the impact, which was largely due to “persistent material shortages and supply-chain disruption”.

Earlier this year, analysts and trade bodies warned that shortages and price hikes resulting from Russia’s invasion of Ukraine could bring big UK projects to a standstill.

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