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Industry sees slowdown as infrastructure contract values plummet by nearly half

The latest figures show the construction sector continues to struggle with value of contracts awarded in February being £4.9bn, a staggering 24% lower than when compared with a year earlier.

According to the latest Economic & Construction Market Review from industry analysts Barbour ABI, infrastructure contract value decreased by 48% compared with last month - even with the largest overall project in February being the £350m Hinkley Point C.

Residential housing dominated the construction sector across February with a total contract value of £2.1 billion, its highest figure for six months. Across the rest of the industry, the education sector followed infrastructure as the only two sectors that saw a decrease in monthly figures.

Unsurprisingly, outside of the Hinkley Point project, the three biggest projects in February were all London based, the £196m 1 Triton Square office project, a £110m residential development named the ‘Perfume Factory’ and the Minories Estate redevelopment worth £100m.

Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “Whilst the slide in infrastructure is disappointing, it is encouraging to see the increases in value for the majority of the construction sectors, particularly commercial & retail, which was in the midst of a three-month slump. With uncertainty surrounding the industry and economy in general, improvements in various sectors should instil confidence, despite the overall figure being subdued.”  

Regionally, it was a similar picture to what the industry has come to expect with the capital leading all regions with a contract award value at 25% of the UK total, largely thanks to the aforementioned three big ticket projects, which also included the three largest hotel, leisure and sport developments in February which totalled over £200m. This was followed by the South West with 17% of the contract award value and the North West with a 13% share.