Construction Demonstrates Resilience - January 2018 Review & Commentary of Construction New Orders from Builders' Conference

01 Feb 2018

The UK construction industry might have lost one of its biggest names with the untimely demise of Carillion.   But the wider industry appears to have carried on regardless, according to The Builders’ Conference CEO Neil Edwards.

With a reputation for being the first in and the first out of any recession in recent history, the UK construction industry has consistently proven its ability to bounce back from adversity.   And at no time has that ability been more evident than amidst the ongoing fallout from the collapse of Carillion.   While the construction giant bypassed the ignominy of administration and went straight into liquidation sparking root-and-branch investigations that will echo across the sector for months and even years to come, the wider industry did what it always does in times of perceived crisis.   It went back to work.

Even though the industry took a day or two to get into its post-festivity, New Year stride, it still managed to bank more than £4.5 billion worth of new contract awards to put it on a par with this time last year and to shake-off any suggestions of a post-Carillion downturn.

Having bagged the coveted BCLive league table “contractor of the year” award at our sell out event at the Savoy London in December last year, Kier Group maintained its momentum, barely drawing breath for the Christmas break.   A haul of 24 contract worth a combined £526.3 million propelled the company to the top of the BCLive league table for January 2018 by a significant margin.   The largest of the 24 contracts is a £160 million new build for Public Health England that will see the construction of a new bioscience laboratory in Harlow, Essex.

Galliford Try claimed second place on the BCLive league table with a total of ten individual new contract awards with a combined value of £240.4 million.   The most notable of these is for the construction of 611 apartments for social housing organisation Genesis Housing Group in North West London.

Volker Fitzpatrick flew into third place thanks to a £205 million contract for the construction of an extension to Luton Airport, one of four new contract awards the company bagged in January.

The largest single contract award of the month went to the Midland Metro Alliance, a joint venture company comprising – among others – Bouygues and Colas.   That JV picked up the £200 million contract from West Midlands Combined Authority to extend the metro rail network serving Wednesbury, Dudley and Brierley Hill in the West Midlands.

In a month that saw nine of the BCLive league table’s Top 10 each win more than £100 million in new work, seventh place went to McAleer & Rushe which bagged a single £130 million contract for the construction of apartments for client Quintain Estates at South Way in Wembley.

As has become the established norm, housing once again provided the lion’s share of work, contributing £1.33 billion to the £4.52 billion monthly total.   Construction for schools, colleges and universities contributed just over £900 million.   It is pleasing to note that spend on road and rail infrastructure also took an upward term, possibly reflecting the Government’s determination to match housing growth with increased spending on transport.

Having faltered slightly towards the end of 2017, Greater London reclaimed its crown as the most active region, with £1.24 billion coming from the nation’s capital.   But the West Midlands, North West and Yorkshire all enjoyed positive months in January 2018.

The precise cause of Carillion’s demise will likely become apparent in the weeks and months to follow, which will be of scant consolation to the many specialist and sub-contractors and suppliers owed money by the failed giant.   One thing is clear, however.   There is no proof that anyone is too big to fail.   In fact, the collapse of Carillion merely serves to prove that the bigger they are, the harder they fall.

Quick review of BCLive table for January 2018

334no companies were detailed as winning new contracts during January 2017

554no new construction orders are detailed on BCLive

Kier Group secure overall top spot with £526.3 million of new work

New order winners in £1M to £5M category was Kier Group & the £1M and under category went to Engie UK a regeneration company based across the UK

Kier Group also secured the most number of new construction orders in the month with 24no

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