Housing helps boost strong June construction
July 2016

After an eventful final week of June with a series of shocks sent through the economy, the construction sector managed to hold strong, with new orders reaching £6.2 billion on the month, the highest figure of any month so far in 2016, according to industry analyst Barbour ABI. The organisation notes however that most of the month was pre-referendum and housebuilder stocks have fallen in the wake of the vote.

Residential was the hero of the month, with contract values up 26% year on year, followed by infrastructure at 14%.

London regained the top spot for construction contract value back from Scotland after it held the position over the last two months, mainly due to a number of major renewable energy projects. London’s construction boost this month was helped greatly by the award to develop the Bechtel House Hammersmith valued at £275 million and the first phase of the £100 million Royal Albert Dock project. Both these major schemes help propel office construction to a total of £650 million worth of contracts awarded on the month, contributing to 81 per cent of all commercial and retail construction value.

Michael Dall, lead economist at Barbour ABI, said: “With the majority of the sector under the assumption that the UK would not vote to leave the European Union the result left many surprised, and our June figures are under the assumption that it would be ‘business as usual’.

“We have seen housebuilder stocks fall in the wake of the vote and anecdotal evidence that projects are being cancelled. However, that is not evident in the data as of yet and it is a case of wait and see in terms of the impact Brexit may have.”