QUICK LINKS… Major announcements Construction headlines Detailed sector analysis IN THIS APRIL ISSUE… Contract awards robust for March but delays now hit READ MORE Medical & Health sector not impacted by delays READ MORE London is leading region for contract awards READ MORE Brought to you by… Register to receive your 10 FREE LEADS today Hinderton Point, Lloyd Drive, Cheshire Oaks, Cheshire, CH65 9HQ T: 0151 353 3500 E: [email protected]W: www.barbour-abi.com @BarbourABI APRIL 2020 Residential Industrial Economic Context About Us Medical & Health The Construction Sector Hotel, Leisure & Sport Commercial & Retail Education Infrastructure 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
8
Embed
Contract awards robust for March but delays ... - Barbour ABI...Eagle Tower, Montpellier Drive, Cheltenham, Gloucestershire, GL50 1TA ... Data from Barbour ABI indicates that the total
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Q U I C K L I N K S …
Major announcementsConstruction headlinesDetailed sector analysis
I N T H I S A P R I L I S S U E …
Contract awards robust for March but delays now hitREAD MORE
Medical & Health sector not impacted by delaysREAD MORE
London is leading region for contract awardsREAD MORE
Brought to you by…
Register to receive your
10 FR EE LE A DS
today
Hinderton Point, Lloyd Drive, Cheshire Oaks, Cheshire, CH65 9HQ
Barbour ABI is the market leading provider of construction intelligence and building project leads. With a team of in-house research specialists and a dedicated chief economist, it provides commercially relevant insight and unique analysis of trends and developments within the building and construction industry. Barbour ABI is the chosen provider of industry data and indicators for GovernmentbodiesincludingtheOfficeforNationalStatisticsandHMGovernmentNationalInfrastructure&ConstructionPipeline,whichoutlines future construction and infrastructure projects where public funding is agreed. Barbour ABI also provides data for independent organisations,suchastheConstructionProductsAssociation.
AMAResearchiswidelyrecognisedastheleadingspecialistproviderof market research and industry insight to the UK building and construction industry.Publishingover150off-the-shelfmarketreportsandindustryforecast bulletins, the team specialise in building and construction, environmental and a host of other B2B sectors in the UK. These high-quality reports are recognised by many leading UK companies as an essential tool in developing their own marketing and strategic policies.AMAResearchalsooffersabroadrangeofbespokeservicesincludingcommissioned market research projects as well as consumer and business surveys.
Designedtoprovideamonthlyoverviewoftheconstructionmarket,Economic&ConstructionMarketReviewincludesindustry insight, market analysis and sector trends. Analysis on the UK regions experiencing the most construction contracts and growth is also detailed, as is insight on the key sectors in growth ordecline.Createdusingourmarketleadingconstructionprojectand company data, this intelligence provides a valuable tool for all those with an interest in construction.
Chosen provider of Construction New Orders estimates to the ONS
Partner of the Infrastructure and Projects Authority in providing the National Infrastructure and Construction Pipeline
Covid-19deliversthefastestandmostsevere economic shock in history
The coronavirus pandemic is delivering the fastest and most severe economicshockinhistory.Withthesituationmovingtoofastforofficialdata to keep up, the severity of the impact is still unknown. All eyes will turntotheONSinearlyMayforMarch’sGDPfigures,butaQ1reductionof as much as 2% does not seem unlikely.Severaleconomicforecastershavepublishedstudiesontheimpactontheeconomy.However,giventhelackofavailabledatatheyarehighlyuncertain. The range of forecasts published to date produce a drop in GDPofbetween5and35%inQ22020.TheMarkit/CIPSPMIsurveyspublishedinMarchreinforcedthisview,withsentimentplungingatthefastestratesince2009.MostforecastsassumeaV-shapedrecoverywhereeconomicactivityrecovers to near previous levels over the remainder of 2020. This appears unlikely, since the length of time frame restrictions will need to be in placeforisuncertain,andtherestrictionscanonlybeliftedgraduallyto
avoidsecondaryoutbreaks.TheWorldHealthOrganisationiswarningthat there may be multiple stages of outbreaks later in 2020 and into 2021, and the Government is starting to communicate that normal conditions will not be able to return until a vaccine is available.Governments and central banks across the world have responded with thelargesteverstimuluspackages,greaterinscopethanthoseafterthe 2008 crisis. The Bank of England has slashed the base rate to 0.1% andexpandeditsQuantitativeEasingprogramme.TheTreasuryhasannounced several unprecedented measures, including:� cashflowsupportforlargebusiness,� a lending programme for small businesses,� thedeferralofVATpayments,� relaxingrulesonbanks’capitalreserves,� paying80%ofemployees’wageswhoarekeptonbytheiremployer,and� support for self-employed workers.
Risksofwiderfinancialcontagionexistasrecordcommercialdebtlevelsfrom a decade of ultra-low interest rates leaves many businesses weak torevenueshocks.Consumerdebtisalsoatextremelyhighlevels.Withunemploymentincreasing,(1millionpeopleappliedforUniversalCreditina2-weekperiod)manyUKconsumersareexposed.TheONS’smostrecentsurveyoftheUKeconomysuggestedthatoneinfourUKfirmshave temporarily closed or paused trading.As European governments start to consider how to ease their national restrictions, such as re-opening schools and some businesses, the UK Government agreed an extension to the lockdown for a further three weeks. The death toll appears to be stabilising, however without a large-scaletestingregimeitisdifficulttoseehoweasywillbetoremovewidespread movement restrictions in the near term.
Economic indicatorsFebruary’sUKeconomicdatashowedtheUKcontinuingtoflatlinebeforetheCovid-19outbreak.Three-monthaverageGDPgrowthbetweenDecemberandFebruarywasjust0.1%(seefig.1.1).InFebruaryitself,GDPfellby0.1%.AsnotedabovealargefallisexpectedinMarchas lockdown measures hit the economy.Atthesectorlevel,inFebruarytheconstructionsector(seefig.1.2)fellsignificantlyby1.7%.Afterstronggrowthtowardstheendof2019,sofarin2020ithascontractedby2.5%.Rollingthreemonthaveragegrowthis-0.7%.Othersectorsremainedbroadlyflat,withmanufacturingexpandingby0.5%.MostrecentinflationdataforFebruarysuggestpriceincreaseswereholdingsteadyat1.7%.However,theONS’smostrecentUKeconomysurveyfoundthatinflationforconsumergoodswasrisingsharply,withits basket of high demand products surging by 4.4% in the last month.
Amid unprecedented government intervention, the acuteness and duration of the impact is uncertain.
0.0
0.5
1.0
1.5
2.0
2.5
GDP annual growth (%
)
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
GDP
Qua
rter
on
Qua
rter
gro
wth
(%)
Q2 Q3 Q4 Q12016
Q2 Q3 Q4 Q12017
Q2 Q3 Q4 Q12018
Q2 Q3 Q4 Dec –Feb-202019
GDP
grow
th ra
te (%
)
ManufacturingProductionGDP Services Construction
2019 monthly average Jan 2020 Feb 2020 Dec-19 to Feb-20 monthly average
-2.0
-1.5
-1.0
-0.5
0.0
0.5
ECONOMIC CONTE X T 1.1GDP growth | Source:ONS
ECONOMIC CONTE X T 1.2GDP by sector | Source:ONS
Hinderton Point, Lloyd Drive, Cheshire Oaks, Cheshire, CH65 9HQ
A M J J A S O N D J F M A M J J A S O N D J F M2018 2019 2020
DatafromBarbourABIindicatesthatthetotalvalueofconstructioncontractawardsinMarch2020was£6.9billion,basedonathreemonthrollingaverage(seefig.2.1).HoweverinMarchitselfcontractawardswereweak,fallingto£3.8bnfrom£7.6bninFebruary.InQ12020,thetotalvalueofcontractawardswas£18.9billionwhichis26.0%aheadofthepreviousquarterisalsoa17.0%increaseonQ12019.However,therewas a marked slowdown in the number of contract awards this month at 576whichis42.6%lowerthanFebruary.An instrumental factor in the less positive performance was the adverse winter weather in late January and February with excessive rainfall and floodinginmanyareaswhichmeantmanysiteswereinundatedpreventingany form of works being carried out. Key to the downturn in output was the1.7%declineinrepairandmaintenanceworkswhicheffectivelycancelledoutthe0.6%growthinnewworkfortheFebruary2020quarter.Newworkgrowthsectorsincludedinfrastructurewhichsawoutput
increase by 2.8% on the previous quarter and also public sector new work whichwasupby4.5%.However,privatesectorhousingoutputremainedstatic and there was a 0.4% decline for the private commercial sector as wellas3.4%decreasefortheprivateindustrialsector.However,thelargestdecline was in the private housing sector repair and maintenance works whichdecreasedby5.6%onthepreviousquarterbutwas9.8%lowerthanthecomparablequarterendingFebruary2020(seefig.2.2).WhilsttheMarch2020budgetincludedanumberofmeasuresthatshould have stimulated the construction sector in 2020 and beyond, these have subsequently been overtaken by the situation surrounding Covid-19.Fortheconstructionsectortheimpactofsocialdistancing
3-month contract awards were strong but March’s in-month value falls to £3.8 billion.
Change Dec 19-Feb 20 to Sep 19-Nov 19
Change Dec 19-Feb 20 to Dec 18-Feb 19
Total All Work -0.2 0.5
All New Work 0.6 2.1
• Public Housing -1.7 9.6
• Private Housing 0.0 -0.6
• Infrastructure 2.8 4.7
• Public (ex Infrastructure) 4.5 1.1
• Private Industrial -3.4 0.3
• Private Commercial -0.4 2.6
Repairs & Maintenance -1.7 -2.6
• Public Housing 2.2 8.8
• Private Housing -5.6 -9.8
• Non-Housing 0.1 -0.1
CONSTRUC TION SEC TOR 2.1Construction activity trends | Source:BarbourABI
CONSTRUC TION SEC TOR 2.2Construction activity by sector | Source:ONS
CONSTRUC TION SEC TOR 2. 3Locations of contracts awarded | Source:BarbourABI
T H E C O N S T R U C T I O N S E C T O R …
Contractawardsrobustbutuncertainty lies ahead
9%
4.2%
15%
7.5%
1.1%
3.6%
4%5.3%
7.5%
27.6%
15.2%
East Midlands
East of England
London
North East
North West
Scotland
South East
South West
Wales
West Midlands
Yorkshire & Humber
Hinderton Point, Lloyd Drive, Cheshire Oaks, Cheshire, CH65 9HQ
THE CONSTRUCTION SECTOR… Contractawardsrobustbutuncer taintyliesahead
CONSTRUC TION SEC TOR 2.4Type of projects | Source:BarbourABI
45.4% Residential
8.9% Industrial
7.1% Commercial & Retail
7.9% Hotel, Leisure & Sport
0.8% Medical & Health
7.4% Education
22.4% Infrastructure
%
imposed by the Government has been immense. The initial advice that construction projects should continue has been subsequently superseded by many, but not all, site closures as the impossibility of imposing the two metre rule on many construction trades and the ability to work safely became increasingly apparent. In addition, the fact that many construction workers used public transport in order to get to sites also led to some organisations suspending works on the grounds of being unable to guarantee employee safety. EarlyApril2020hasseenthedelayingofasignificantnumberofprojects and the furloughing of many job functions within construction organisations as well as manufacturers of key materials such as bricks and blocks. In addition, the issue of building materials supply has also been added to the equation with many of the leading merchants operating “only essential works” initiatives as well as restricting access to outlets by operating online ordering and delivery to site policies. At thispointintimetheoutlookfortheconstructionsectorisforsignificantreduction in output over the short-term.
Construction SectorDatafromBarbourABIindicatesthatthetotalvalueofconstructioncontractawardsinMarch2020was£6.9billion,basedonathreemonthrollingaverage(seefig.2.1).Monthlycomparisonsshowthatthisisanincreaseof6.4%onFebruarywhilstannualcomparisonshows29.2%increaseonMarch2019.InQ12020,thetotalvalueofcontractawardswas£18.9billionwhichis26.0%aheadofthepreviousquarterisalsoa17.0%increaseonQ12019.However,therewasamarkedslowdowninthenumberofcontractawardsthismonthat576whichis42.6%lowerthan February.
Project by RegionAnalysisbyregionshowsthatLondonmaintaineditsleadingpositionholdingashareof27.6%ofallconstructioncontractawardsinMarch.ThesecondlargestregionwastheSouthEastwith15.2%ofawardsandwascloselyfollowedbytheYorkshire&Humberregionwhichaccountedfor15.0%ofallconstructioncontractawards.Waleswasagainthesmallestregionwithattributableshareofjust1.1%(seefig.2.3).InMarchLondonwasthelocationforthelargestcontractaward,whichwasthe£500millionPlumstead,WestThamesmeaddevelopmentinWoolwich.TheprojectwillseeBerkeleyHomesEastThamesprovideatotalof915residentialunitsinsevenstructuresaswellasgroundfloorcommercial space. The second largest contract award this month was the£335millionA63CastleStreetImprovementsinKingstonUponHull.AwardedbyHighwaysEnglandtoBalfourBeatty,theprojectinvolvesimprovementsbetweentheStJamesandPorterStreetjunctiontotheMarketPlaceandQueenStreetjunctionandhasa60monthtimeline.ThereweretwocontractawardsvyingforthirdplaceinMarchandwerebothvaluedat£100million.TheLandinginBroadway,MaidenheadwillseeMcAleer&Rusheprovideatotalof375residentialunitsaswellascommercialspaceinfourstructureswhilstintheYorkshire&Humberregionthe£100millioncontractforthePremierOilEasingtonTerminalOnshoreGasPipelinewasawardedtoSaipem.
Rank Project Value (£m) Region Sector
1 Plumstead, West Thamesmead – plots 2, 3, 4, 7 & 8 500 London Residential
2 A63 Castle Street improvements 355 Yorkshire & Humber Infrastructure
4 The Landing, Maidenhead – buildings A, B, C & D 100 South East Residential
5 University of Glasgow – Adam Smith Business School & Post Graduate Hub 86 Scotland Education
6 Oval Gas Works, Kennington Oval – 738 flats, offices & cafe 72 London Residential
7 A19 Norton to Wynyard widening DELAYED 63 North East Infrastructure
8 Camden Town Hall refurbishment DELAYED 63 London Infrastructure
9 44 Clapham Common, South Side – 296 flats and commercial development 60 London Residential
10 Birmingham 2022, Commonwealth Games – Alexander Stadium redevelopment DELAYED 60 West Midlands Hotel, Leisure & Sport
CONSTRUC TION SEC TOR 2.4Top ten biggest projects by value | Source:BarbourABI
Types of ProjectTheresidentialsectormaintaineditsleadingpositioninMarchaccountingfor45.4%ofallconstructioncontractawards.Withashareof 22.4% of awards, infrastructure was the second largest sector this month and was followed by the industrial sector with attributable share of8.9%(seefig.2.4).ThelargestresidentialawardthismonthwasthePlumstead,WestThamesmead development in Woolwich which will also include 5,303sqmofcommercialspace.ThelargestinfrastructureawardwastheA63CastleStreetImprovementsinKingstonUponHullwhichwillalsoincludeanewbridgeandinfrastructureimprovements.Rochesterwas the location for the largest industrial contract award which was the£35.5millionPlot1bLondonMedwayCommercialParkwhichwillprovideanew35,554sqmwarehousefacility.
COVID-19 UPDATE209 PROJECTS DELAYED
Due to the impact of Covid-19 209 of the contract awards reported on in March 2020 have now been put on hold at a total value of £1.2 billion
Hinderton Point, Lloyd Drive, Cheshire Oaks, Cheshire, CH65 9HQ
T H E S E C T I O N Y O U A R E T R Y I N G T O V I E W I S A V A I L A B L E T O B A R B O U R A B I C U S T O M E R S O N L Y .
Why not contact us today to find out about our project data and how you can access Economic & Construction Market Review every month?
Already a Barbour ABI customer?If you are a Barbour ABI customer you can download the full edition by logging in to Evolution using your username and password.
Not a customer?If you are not a Barbour ABI customer please contact us on:Call: 0151 353 3500Email: [email protected]: www.barbour-abi.com
Hinderton Point, Lloyd Drive, Cheshire Oaks, Cheshire, CH65 9HQ
Bespoke Research & ConsultancyAMA Research is a specialist provider of market research and insight to the UK building and construction industry. We offer a wide range of research and consultancy services to support and inform strategic decisions, based on 30 years experience in the sector.
EXPERTS
Experts inall fields
AMA’s experienced in-house team of researchers are experts
in their fields and are adept at conducting original and relevant research for both reports as well
as commissioned services.
REPORTS
Our individual reportsOur research reports are essential
to help your business grow through detailed market analysis and data. We give you the insight to make strategic market-focused
decisions in your industry.
BESPOKE
Bespoke research and consultancy
Let our team put their expertise to work on your behalf. We
have substantial experience in undertaking a wide variety of research projects for national
and global companies.
SUBSCRIPTIONS
Subscriptions
Access our complete library of reports for a discounted price. We offer users the opportunity
to subscribe to all published reports in their area of interest
for a fraction of the cost.
www.amaresearch.co.uk To find out more about how our insight can help you develop your business:email us at [email protected] or call us on 01242 235724
Hinderton Point, Lloyd Drive, Cheshire Oaks, Cheshire, CH65 9HQ
A Construction CRM Solution ConstructionBOS CRM includes: - Barbour ABI integration - Full business process review - Bespoke configuration- Data migration - Set up - Onsite staff training - Phone & email support with our inhouse support team
Make the most of your Barbour ABI data with ConstructionBOS.
The sales tool for Barbour ABI customers
Access your Barbour data straight from your CRM
Simply login into your CRM & all your leads are waiting for you
ConstructionBOS is a complete Customer Relationship Management (CRM) solution specifically designed for the construction industry! ConstructionBOS includes all needed professional services.