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Housing & Infrastructure Prosper in 2016 as the rest of Construction Struggles

After a year of unpredictability for the economy as a whole, overall contract value figures for the construction sector reached £70 billion, decreasing by 5 per cent compared to 2015.

However, according to the latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI, Housebuilding continued to grow across the majority of the year, with total value of contracts at £23.6 billion, a year-on-year increase of 11 per cent. Furthermore from the Housebuilding sector, the planning activity also increased in 2016 with the total value of projects reaching an advanced planning stage of £49.8 billion, an increase of 19.2% from the value in 2015.

Another sector that saw an increase in yearly contract value was Infrastructure with a 1.9 per cent increase, reaching £19.3 billion. Infrastructure also had nine of the top ten highest value construction contracts in 2016 (see figure 1.1).

(Figure 1.1, Source: Barbour ABI)

Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “It is clear from our yearly figures that the Housebuilding sector was the main component of growth across 2016. Even after the initial shock of the Brexit vote, where many housebuilders share prices fell in excess of 20 per cent, this did not hamper activity with both the current and future pipelines of work remaining strong.”

“However Infrastructure cannot be overlooked, with nine out of ten of the biggest projects across all of construction coming from this sector. Overall for Construction in 2016, output remained healthy but contract award values did decline.”
“With important political decisions likely to come in 2017 that could have implications on construction activity, particularly in the commercial sector, it would seem that the future will be difficult to predict, as Britain’s trading position remains unclear for now.”