Infrastructure deals top £2bn

THE North West led the way in the infrastructure sector as the value of contracts awarded nationally reached £2bn, according to Cheshire-based construction intelligence services company Barbour ABI.

Based on a three month rolling average, deals last month were almost 90% higher than July 2014 and the largest total for more than 18 months.    

According to the latest Economic & Construction Market Review from Barbour ABI, the two largest infrastructure contracts awarded in July included a £250m extension to the Burbo Bank offshore wind farm in Liverpool bay and a Beddington, London-based ‘energy from waste’ facility worth £200m.

Overall for construction in July, infrastructure had the highest proportion of contracts awarded by value with 27%  of the total. Even the residential sector, a linchpin of construction over the last few years, was second to infrastructure with 26 per cent of total contract value.

The North West dominated infrastructure for the month, with 32% of all contract values and an increase of almost 25% in activity when compared to July 2014. This was helped significantly by the Burbo Bank project and the £130m M6 motorway junction 16-19 development.

Lead economist at Barbour Michael Dall said: “Over the last five months, continued spending on road projects and the growing amount of renewable energy contracts has propelled infrastructure to become the top performing sector in construction for July.

“It is evidence that the projects proposed by the Government are starting to have an impact on the construction industry, though it is important that these move from contractor appointed to spades in the ground for the full effect to be realised.”

“However, construction is still lagging behind its pre-recession peak by 3.2%, which compared to service sector growth of 9.2%, exemplifies the scale and challenge of rebalancing the economy.

 “The commissioning of the large scale infrastructure projects that we have seen in July is encouraging but this momentum must continue to ensure growth is sustained.”