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Construction Activity Falls In June Despite Long-Term Gr
22nd July 2014

Figures released today last week reveal that the total value of new construction contracts fell in June, but the industry should remain optimistic about its long-term future, say construction intelligence suppliers Barbour ABI.

Barbour ABI, which supplies construction data to the Office for National Statistics (ONS), Cabinet Office and Treasury, has published its latest Economic & Construction Market Review, which shows that the total value of all new construction contracts awarded in June totalled £5.2 billion, a marginal decrease of 0.7 per cent compared to May.

However, construction levels were 10.5 per cent higher when compared with June last year, which is further evidence of the improving performance of the industry in the long term.

Michael Dall, lead economist at Barbour ABI, commented: “While this is only the second month this year in which month-on-month values have fallen, we’re still not seeing the same high rates of growth as we did towards the end of 2013. This is an indication that the growth we’ve become used to over the last twelve months is beginning to plateau.

“Looking ahead, the long-term picture is still one of growth. Year-on-year increases are a positive indication that the industry is continuing to grow, even though this is at a slower rate. We are confident that it is a picture of moderate growth going forward but perhaps not the booming rates that the financial markets seem to be expecting.

“The Government’s updated construction pipeline released on 2 July, which represents £116 billion of work, should also be a huge boost to the industry as infrastructure output has been disappointing up until now.”

The report, also reveals that residential construction continues to hold around a third of the total value of contracts awarded in the UK. Despite this, the sector saw a 7.6 per cent decrease in the total value of contracts compared to last month, totalling £1.67 billion.

London was once again the UK’s hotspot for construction activity in June, accounting for 17 per cent of the UK total as a result of big ticket projects including the £100 million redevelopment of the International Broadcast Centre at the Olympic Park and the residential development at North Wharf Gardens in Paddington Basin worth £70 million contract.

The Economic & Construction Market Review is a monthly report designed to give valuable insight into UK construction industry performance. It is compiled from Barbour ABI’s records of construction data for every UK planning application and key indicators such as the Office for National Statistics’ Construction New Orders data.

Report highlights:

The total value of new UK construction contracts awarded in June was £5.2 billion based on a three-month rolling average – 0.7 per cent down on May but a 10.5 per cent increase on the value recorded in June 2013

The number of construction projects within the UK in June was up 11 per cent from May and 34.9 per cent higher than May 2013

Residential had the highest proportion of contracts awarded by value in June with 30 per cent of the UK total
The majority of contracts awarded in June by value were in London, which accounted for 17 per cent of the UK total 

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