Yorkshire construction industry pipeline set to surge

After a weak 2016, the construction industry in Yorkshire & Humberside is gearing up for a significant rise as work in the pipeline surges. Civil engineering and private housing are behind a forecast rise of 17% in the underlying value of project expected by Glenigan starts this year, which is expected to continue into 2018. Glenigan economics director Allan Wilen says: “Workloads weakened in 2016 after a lack of project starts the previous year and only just remained in positive territory, but the level of work moving through the planning system gives rise to a hope for a major improvement.” In the third quarter of 2017, the value of underlying project starts in Yorkshire edged up just 6%. Work in the pipeline was more subdued in this latest period but in the 12 months to September 2017 the underlying value of project starts surged 38%. In the first nine months of this year, social housing has been the main bright spot for Yorkshire’s construction industry according to Glenigan’s data. Overall housing starts have been weak according to the National House-Building Council (NHBC) and fell 11% in the three months to August 2017 but that is changing as the private rented sector (PRS) kicks off. In October, Irish developer Dandara let a contract on its £70 million Holbeck Urban Village project in Leeds to build 744 PRS homes. This will soon boost the NHBC figures. Commercial construction activity surged 11% - albeit from a low base - in Q2 2017 according to JLL/Glenigan, and the prospects of significant infrastructure growth have been boosted by the onset of the new YORCivil Framework. The second edition of the framework was agreed this summer and nearly 30 contractors including industry giants such as Kier and Morgan Sindall are expected to benefit from spending of £1 billion channelled through YORCivil 2. Both contractors are already amongst the top 10 contractors in Yorkshire according to Glenigan with orders of £193.5 million and £128 million respectively. Interserve, winner of the contract to build Holbeck Urban Village, is the region’s top contractor in Yorkshire with an order book totalling £286.5 million in the 12 months to Q3 2017 and on YORCivil2. Two other big contractors ranked in the Yorkshire top 10, Galliford Try (£153 million) and Carillion (£86.2 million), are also on the framework but so are a host of small-to-medium-sized local players, such as Esh, PBS and Thomas Bow. Mr Wilen adds: “In the past nine months, the underlying value of infrastructure starts has fallen 22% and this is likely to be, in part, due to a hiatus between the two YORCivil frameworks. “With the new edition up and running, we would expect to see an upturn in infrastructure starts in Yorkshire in the medium term as projects begin to be called off from this framework. “The nature of YORCivil, which has been set up across four regions and in lots, should see work benefitting all levels of the construction industry in Yorkshire and Humberside.” For contractor’s in God’s Own Country, as Yorkshire is seen by its locals, that upturn is long overdue.