Construction slows in January with major projects thin on the ground

The UK construction sector is fighting a number of headwinds as January figures revealed new contracts were 10.6% lower than last year, at £5.4 billion.

Barbour ABI's Economic & Construction Market Review, which measures construction contract values awarded across the UK, largely blamed a lack of major projects on the fall.

Residential housing and infrastructure dominated the construction sector across January, with contract values at £1.9 billion and £1.7 billion respectively, which combined, is more than 65% of the total value of construction in the month.

Across the industry, education and hotel, leisure & sport sectors both saw monthly decreases in value in January, which could be seen as particularly concerning due to December being traditionally a quiet month, the report said. The remaining sectors of residential housing, infrastructure, commercial & retail, industrial and medical & health all saw increases on the previous month but overall below the levels of January 2017.

Michael Dall, Lead Economist at Barbour ABI, said: “The recent collapse of Carillion has not done much for confidence in the sector, which is already facing a number of headwinds. Mainly due to a lack of major projects, construction has been held back in January. Nevertheless, encouraging figures from the residential housing and infrastructure sector is pleasing, but other sectors now need to help pick up the slack, such as hotel, leisure & sport which produced its lowest figures in January since October 2015.”