Infrastructure contract awards decrease by 10.3% in 2019

Projects like the Transpennine route upgrade are expected to deliver a boost to construction sector in 2020.

The total value of infrastructure contract awards in 2019 was £10.4bn which is a decrease of 10.3% on 2018. This is the second consecutive year of decline, with the value of infrastructure awards having decreased by 50% between 2017 and 2019. The figures for 2015-2017 were boosted considerably by several very large contracts such as the enabling works for HS2.

The latest insight from construction industry analysts Barbour ABI highlights levels of infrastructure contract values awarded across Great Britain. Regional analysis indicates that the north west accounted for the largest share of infrastructure contract awards in 2019 at 24.5%, which is an increase of 17.2% on 2018. The east of England was the second largest region accounting for 11.8% of awards which has remained at the same level as 2018.

Barbour say that the outlook for infrastructure looks positive with a strong pipeline. Projects such as HS2, the Transpennine route upgrade and Hinckley Point C will contribute to growth in the sector. However, the feasibility of this funding is currently under review, with the government due to make a number of announcements around the time of the March budget.

Commenting on the figures, Tom Hall, chief economist at Barbour ABI and AMA Research, said: “While the pipeline may appear positive, the risk of major projects in the planning system being delayed, descoped or cancelled remains. This week Boris Johnson and senior ministers will meet to decide the fate of HS2. The sector’s short-term momentum remains dependent on previously promised projects, while the chancellor’s budget in March will give an indication of travel over the medium term.”

The construction sector will be watching the politicians’ deliberations and any subsequent announcements very closely. The future health of the industry depends in large part to the government maintaining its commitment to delivering landmark projects like those mentioned above and to fulfilling its promises made during last year’s general election campaign to fund an “infrastructure revolution”.

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