NEW analysis has revealed that a ‘late rebound’ in contract awards and a boost in planning approvals rounded off a ‘difficult’ first quarter for the UK construction industry.
Latest analysis from construction intelligence provider Barbour ABI shows the majority of sectors are performing ‘at or above’ long-term average, with education at its highest level for 12 months.
£7 billion worth of contracts were awarded in March.
“At the end of Q1 it’s broadly good news with new activity being brought forward in the face of uncertainty and ongoing constraints,” said Tom Hall, chief economist at Barbour ABI. “And, while activity is very volatile at the moment the smoothed trend shows that the pipeline is looking solid going forward too, albeit at slightly lower levels compared to the recent past.”
Barbour ABI revealed that performance varies across sectors. While most are at or above their average year-on-year levels, the residential and commercial sectors are both continuing to struggle. Compared with the end of last year, the commercial sector is down by nearly a third when it comes to contract awards, while new planning applications for residential are described as ‘weak’.
Tom added, “Residential has finished the quarter with a solid performance after two weak months. However, it is a sector that is expected to struggle this year. We’re seeing the lowest level of new planning applications since May 2020, when the country was in the first Covid-related lockdown.
“This is common in the face of wider economic uncertainty but is going to cause issues when it comes to supply in the market and the wider trend around property values and pricing. It could be a rocky period as the sector finds a new level of consistency.”
The data was published as part of Barbour ABI’s monthly Snap Analysis Report which reviews activity in the residential, infrastructure, commercial, hotel and leisure, industrial, healthcare and education sectors.
