Going it Alone - June 2017 Review & Commentary of Construction New Orders from Builders' Conference

18 Jul 2017

The UK construction industry needs to make its own luck if it is to ride out a period of farcical and catastrophic political uncertainty, according to The Builders’ Conference CEO Neil Edwards.

Given the surprise outcomes of the Brexit vote and the US presidential election, we probably should have taken pollsters’ predictions of a landslide win for the Conservative party with a large pinch of salt.   As it transpired, Theresa May and her cohorts barely scraped together enough support to even have the opportunity to form a government; throwing the nation – and its construction industry – into a state of caution and confusion that echoed the very worst of the nation’s decision to quit the European Union.

Where we had hoped – as an industry – for certainty and a clear path ahead, we have been presented with neither.   Indeed, with the weakened government now ensconced in complex Brexit negotiations, it seems that construction has been pushed to the backburner and didn’t even merit a mention in the latest Queen’s speech, which surely throws into question the new runway “planned” for Heathrow Airport.   Stir in the likely repercussions of the Grenfell Tower disaster, and the past month has been every bit as bad for the UK construction sector as it has for Theresa May’s ego.

Not that you would think so looking at the BCLive league table for June 2017.   Thanks to a £1 billion, single contract award haul for Sir Robert McAlpine, the table has once again achieved a respectable £3.65 billion combined total in spite of the farcical political backdrop.  

That £1 billion award is a re-let of the contract to redevelop Battersea Power Station that was originally placed with Bouygues back in 2015.   It includes the construction of more than 1,300 new homes, a 167-bedroom hotel, restaurant space, a community hub and car parking.   Both client and contractor remain tight-lipped over the reasons behind this re-letting.   But, regardless of the circumstances, it propels Sir Robert McAlpine to the top of the BCLive league table by a considerable margin.

In second place – more than £800 million behind – is Vinci Construction which netted three contracts worth a combined £151.5 million.   The largest of these is a £130 million order for the construction of new student accommodation at the University of Hull, providing the Humberside region with a much-need boost.

Morgan Sindall – proponents of the “little and often” school of contract awards – swept to third slot with a combined £123.2 million haul comprising no less than 17 new orders.   Like Vinci Construction, the largest order came in the form of a £29.4 million student accommodation new build, this time for Selecta Property Group for a development in Southampton.

Mace, Kier Group and BAM claimed fourth, fifth and sixth spot respectively on the BCLive league table, with each surpassing the £100 million mark in a month that is once again housing-led.

All in all, June 2017 will go down as a pretty average month for new contract awards.   But take out that mammoth £1 billion order won by Sir Robert McAlpine – which, let’s not forget – is effectively a “regurgitated” contract – and the picture looks very different indeed.   And with Theresa May & Co now focused on and distracted by Brexit negotiations, the industry can expect precious little help from government.

If we are to halt the slide and head off a premature return to recession and austerity, the industry will just have to make its own luck.

Quick review of BCLive table for June 2017

281no companies were detailed as winning new construction orders during June 2017

472no new construction orders are detailed on BCLive

Sir Robert McAlpine secure overall top spot with £1 billion of new work

New orders in £1M to £5M category, RG Group from West Malling in Kent came out on top & in the £1M and under category Morgan Sindall Group were the winners

Morgan Sindall Group plc secured the most number of new construction orders in the month with 17no