NEW research has found that approval of infrastructure projects in the UK increased 298% in October – the second consecutive month the sector has posted triple digit gains.
Construction analysts Barbour ABI revealed the huge gains are driven by movements in green energy projects. Five renewable energy projects, all over £100 million in value, drove the October gain. Ossian Offshore Wind Farm 3.6GW is the largest of these projects at £3.6 billion. In the previous month 700MW and 1000MW battery storage projects in Scotland and the north east were behind the big numbers.
Ed Griffiths, Barbour ABI head of business and client analytics, said, “Scotland has an exceptionally strong month with approvals nearing £5 billion in October, bolstered by education and clean energy but much of this value comes from a small number of projects.”
The wider construction industry saw 44% and 59% gains in monthly approvals. in September, new applications also appear to be following the trend with a 18% increase in infrastructure projects entering the planning system, led by a series of battery storage projects and wind farms.
Elsewhere, housebuilding saw some positive signs, while commercial and retail projects saw a strong month for contract awards rising 189% to £1.1 billion.
In general, awards in October saw a decrease of 36% to £6.5 billion, described as returning to normal after an inflated September.
Griffiths added, “Although we have seen a decrease in contract awards from last month, given the high value that came from a small number of projects, it is more realistically another flat month for awards overall. The government’s recent budget offered little in tackling the major risks to the industry. In fact, in a labour-intensive industry like construction, labour costs will likely increase putting more pressure on SMEs.
“The reform to apprenticeships under the new Growth and Skills Levy has the potential to help reduce the skills shortages but focus on construction apprenticeships will have to be pushed by the sector itself. Housebuilding and Infrastructure were areas of promise. However, the number of housing starts and finishes has increased in recent months possibly showing an increased confidence in the sector.”
