Reality Has Bitten For Construction Industry, Says Builders’ Conference

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03 June 2020

Builders’ Conference, an independent trade body, has published a review and commentary on the effect of COVID-19 on construction contract awards.  

CEO Neil Edwards has described how he feels “reality has bitten” for the industry throughout May, after an initial two months of unprecedented levels of new contract awards.

£7.8 billion and £9.7 billion of new contract awards were achieved in March and April respectively. However, May’s figures end with just £3.9 billion.

Edwards describes the dramatic change: “The hope, for now at least, is that UK construction companies will have taken the time to repair the proverbial roof while the sun was shining. The dark clouds have gathered, and a storm looks to be approaching.”

Builders' Conference is a not for profit trade body providing members and the construction industry with sales leads, market intelligence and statistical data.

May’s 2020 contract awards data

The UK construction industry has grown accustomed to a monthly norm of around £4 billion of new contract awards. 

However, May’s figures demonstrate a stark downturn:

• Balfour Beatty achieved £394.1 million of new orders – including a £350 million refurbishment and repair contract for Highways England as part of the A63 Castle Street improvement programme in Hull
• Berkley Group had six new contract awards – The largest of these is a £120 million new build contract for 756 riverside dwellings at Huntley Wharf in Reading
• A Costain Jacobs joint venture partnership won a £183 million refurbishment and repair contract with Highways England at the A1 in Scotswood, Newcastle upon Tyne.
• CG Fry achieved £149 of new awards. The largest of these is an £80 million mixed-use development in Shepton Mallet that comprises 600 dwellings, a care home and a primary school

In all, ten companies secured more than £100 million of new contract awards during the month. Kier Group, who reportedly has a reputation for winning a new contract for each working day each month, picked up just 16 in May. Just 232 companies reported new work compared to the 350 to 400 that has become the established norm.

“The hope, for now at least, is that UK construction companies will have taken the time to repair the proverbial roof while the sun was shining. The dark clouds have gathered, and a storm looks to be approaching.”

–Neil Edwards

CEO, Builders’ Conference

With 171 contracts worth a combined £1.8 billion, housing accounted for almost half the monthly total of all work; while roads a subsection of infrastructure contributed almost £900 million.

London and Yorkshire top regions

With 61 new contracts valued at £596 million, London achieved the top spot in the regional run down. However, with more than half a billion pounds in new contract awards, Yorkshire came a close second.

Picture: A photograph of an architectural drawing

Article written by Ella Tansley | Published 03 June 2020

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