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New figures released by construction analysts Glenigan today (10 June) reveal the intense competitive pressures still faced by the UK’s biggest contractors as the industry emerges from recession.

Glenigan’s latest Major Contractors Competitive Review found the value of contracts awarded across the industry in 2013 fell 6% to £48.1 billion, despite an 8% rise in the number of projects awarded.

The report, produced in partnership with CNinsight, indicates this fall has had a knock-on effect on the UK’s top 50 contractors’ collective market share, which dropped 12% last year.MajorContractorsReview_June-14

The decline in the value of projects awarded was principally due to a fall in larger value schemes, with a double-digit fall in contract awards worth £100 million or more.

Conversely, there was an increase in the value of work awarded worth less than £5 million and between £5 million and £10 million.

This shifting pattern of work has presented twin challenges for major contractors, according to Glenigan Economics Director Allan Wilén.

“The top 50 have faced increased competition from specialist contractors for the largest projects, especially civil engineering schemes,” he said.

“In addition, the top firms have ceded market share of the fast growing pool of smaller value schemes.”

Wilén added: “Where the top 50 firms have been able to maintain or increase market share is in those areas that they are already dominant: building projects in the £20 million to £100 million value bands.

“The net result is that top 50 contractors’ collective market share fell from 64% to 52% of work awarded in 2013.”

For the top 50 contractors, 2013 was a year of decline in the value of project awards within most of the industry sectors. The sharpest falls were observed in the community & amenity and civils sectors, though all of the traditionally commercial sectors (office, retail and hotel and leisure) saw double-digit declines.

Looking ahead, the construction pipeline is anticipated to grow firmly over the next two years. In addition, Glenigan is forecasting the strongest growth to be in sectors such as industrial and commercial buildings, which should provide a particular boost to top 50 contractors’ workload.

“As economic growth gathers momentum, improved investor confidence should support the realisation of the higher value schemes for which the top 50 contractors have historically been dominant players,” Wilén said.

“However, while the tide may now be turning in their favour, the analysis of recent contract awards indicates that competition for such work will be strong, both between top 50 firms and from other contractors.”

Download the Glenigan and CNinsight Major Contractors Competitive Review 2014 here.

PR contacts:
Kirsty Maclagan (Marketing and Communications Manager)
T: +44 (0)1202 786 842│E: kirsty.maclagan@glenigan-old.thrv.uk
Allan Wilén (Economics Director)
T: +44 (0)751 579 4625| E: allan.wilen@glenigan-old.thrv.uk
Notes to the Editor:
  1. Glenigan and CNinsight identified the top 50 main contractors by value of work won over the last five years and analysed their performance over this period relative to the industry as a whole.
  2. The contract analysis is based on contracts awarded in each year (excluding framework agreements).

About Glenigan:
Glenigan is the UK’s leading provider of construction data, contract leads and construction market analysis. Combining comprehensive data gathering and exhaustive research with detailed statistical modelling and expert analysis, it delivers a trusted insight into UK construction trends and activity. Glenigan customers include government agencies, construction companies and suppliers of materials and services to the industry.

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