Top sectors set to benefit from increase in main contract awards

A pointer to which sectors are going to offer the brightest opportunities for winning new construction contracts in 2022 emerged in recent main contract awards data from Glenigan.

Figures for main contract awards in the fourth quarter of 2021 show a sparkling performance in the utilities, private housing, and community & amenity sectors.

The year ended on a high note for utilities contractors. The value of all main contract awards in the sector surged to £2,683 million in the fourth quarter, more than double (+107%) the level of the previous three months and up 148% on the period a year earlier.

As the upturn is not reflected in data for underlying utilities contract awards, it would suggest much of the work being let in the sector has been on major projects (valued at over £100 million.)

Busy start to 2022 for housebuilders

Contractors working in private housing look set for a busy start to 2022 after all main contract awards worth £14,705 million were let in the sector in the fourth quarter; a total which was up 37% up on both the previous three months and on the period a year earlier.

New developments which are being launched by the volume housebuilders are generating new contracts across the industry; the value of underlying private house contract awards (worth under £100 million) in the fourth quarter was up 42% on the period a year earlier. A healthy level of new contracts also chimes with Glenigan’s latest forecast that the value of underlying private housing project starts in 2022 is set to rise by 6% in 2022 after a 19% rise last year.

The positive message on the sector is echoed by the companies themselves. Taylor Wimpey said recently that it expected a modest growth in completions in 2022, followed by more significant ‘outlet-driven’ growth in 2023. The group’s Yorkshire division has recently awarded a £102 million contract to Redrow Homes for a development in Leeds involving new 4,500 homes and a community hub (Project ID: 21521834).

Community development

Another promising sector which saw a strong finish to the year was community & amenity construction. All main contract awards in the sector in the fourth quarter were worth £331 million, well above the previous three months and up 35% on the period a year earlier. Underlying main contracts in the sector were also up by 35% on period a year ago. Contractors in the sector have recently benefitted from more ‘blue light’ projects for the emergency services and Glenigan is forecasting a 4% rise in community & amenity project starts this year.

There are also some significant schemes in the community & amenity pipeline. Plans have recently been submitted by Ministry of Justice, the biggest client in the sector, for a £91.9 million prison house blocks extension at HMP Highpoint in west Suffolk where work could potentially start later this summer (Project ID: 22009764).

Elsewhere, work is set to start this autumn on a new £110 million privately financed prison near Inverness, HMP Highland Development. The scheme for the Scottish Prison Service is set to run over 24 months (Project ID: 16153800).

Glenigan customers can see future utilities, private housing, and community & amenity sector construction opportunities if part of your subscription.

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