Contract awards surge

The construction industry received a welcome boost in the three months leading up to January 2024, with contract awards surging by 18% compared to the previous quarter.

Major project contract awards averaged £3,589 million per month, which is a 136% increase compared with the preceding three months and also up by 2% against the previous year.

Leisure leads

The hotel & leisure sector experienced a mixed period in the latest quarter but some positive indicators were evident against a gloomy background. The overall value of contract awards was down by 45% against the previous year, but was still 3% larger than during the preceding three months.

At £772 million, hotel & leisure main contract awards increased 18% against the preceding three months and the value of major projects doubled to £300 million.

Contracts awarded in this sector during the latest quarter include the £35 million Dundonald International Ice Bowl in Belfast, where Heron Bros have been recruited to carry out the work and is due to start in May (Project ID: 11115892).

Elsewhere, Royal BAM have been confirmed as contractor on the £40 million Cultural Heart entertainment centre in Huddersfield (pictured) for Kirklees Council (Project ID: 22074195) and Belgian contractor Pellikaan have been signed up to build a £33 million leisure centre at Epping in Essex for Epping Forest District Council (Project ID: 20513491).

Housing rise

The residential sector has suffered in the past few months but there was a 20% rise in major project awards compared to the previous three months.

Deals confirmed during the three months to January 2024 include a £100 million job for Wavensmere Homes from Clowes Developments to build the Friar Gate Goods Yard scheme, which will provide 227 houses and 49 flats in Derby (Project ID: 23004540).

Community drive

In the community & amenity sector, contract awards over the three months to January 2024 totalled £783 million, which is up by 28% on the previous quarter and a healthy 55% up on the same stage 12 months ago.

There was a 67% rise in major project contract awards, which were boosted by the confirmation of ISG as contractor on a £300 million prison scheme at Grendon Springhill in Buckinghamshire for the Ministry of Justice (Project ID: 21094516).

The rise in this sector was not driven solely by major projects though and there are signs of growth at an underlying level.

For projects valued below £100 million, there was an increase of 52% compared to the previous quarter as £483 million-worth of contracts were awarded.

Contracts awarded at an underlying level range from a £24.4 million visitor centre in Oldham won by Willmott Dixon (Project ID: 20082789) to a £54 million deal for Morgan Sindall from the Defence Infrastructure Organisation for the redevelopment of Marne Barracks in Yorkshire (Project ID: 24020611).

Bright spots

As the industry heads into another year that poses plenty if challenges, some bright spots are emerging to hang onto and plan ahead.