Reality Bites - September 2017 Review & Commentary of Construction New Orders from Builders' Conference

02 Oct 2017

After the HS2-fuelled highs of August 2017, the BCLive league table returned to Earth with a bump this month.  The Builders’ Conference CEO Neil Edwards looks at the figures.

Anyone hoping that the unprecedented high achieved by the BCLive league table in August would be maintained or prompt a resurgent boost of industry confidence was either naïve or out of touch with the realities of the current state of the UK construction nation.

Almost £7 billion in contract awards against a single mammoth project - and the £11 billion monthly total it created – was a freak; an economic glitch; an anomaly.   And in true construction fashion, the BCLive league table for September bit back hard, the overall total plummeting to just over £3 billion and returning the industry to the downward trajectory it has endured in the latter part of the year.

On the very last working day of September Galliford Try pipped Sisk Group to be top of the pile on BCLive league table amassing £269.7 million of new contract awards. The largest of these was for the building of 440 dwellings for Legal & General Group at Ferry Lane in Walthamstow, East London.

Housing was also largely responsible for Sisk Group claiming the number two position with a monthly haul of 3 new contract awards worth a combined £222.6 million.  The largest of these was a £160 million new build housing project for Muse Developments at Lewisham Gateway in London.

Wilmott Dixon racked up an impressive 15 project haul worth a total of just over £200 million to secure the number three position in September.   This included a £38 million award for the construction of two new offices for Rhondda Cynon Taff County Borough Council in Mid Glamorgan, Wales.

Wates Ltd took fourth position with an £82 million contract award for the construction of new offices for MEPC plc in Yorkshire taking the company’s monthly total to £192.1 million.   Meanwhile, a newcomer to the upper echelons of the BCLive league table – Colmore Tang Construction – picked up seven new contract awards worth a combined £131 million to take the number five spot.   The largest of these was a £50 million contract for the construction of new apartments in Birmingham for Seven Capital plc.

In a month in which only the top eight companies on the BCLive league table each won more than £100 million in new business, Morgan Sindall Group – the perennial leader in terms of contract awards by volume – picked up 16 new contract awards.   These were worth a combined £101.3 million, the largest a £45 million deal with Welwyn Hatfield Borough Council Regeneration scheme for 150 units via the Lovell Partnership brand of Morgan Sindall Group.

Overall, housing-related projects contributed more than forty percent of the league table’s monthly tally with £1.41 billion.   Schools, colleges and universities added a further £683.1 million.

Geographically, Greater London was – as ever – top of the pile.   But, once again, the region failed to top the £1 billion per month mark it had been achieving until recently.   Furthermore, the number of contract awards gathered during September was the 4th lowest for more than 20 months at just 468 projects.

If that were not evidence enough of a continued slowing in demand, then the quarterly round-up figures most certainly are.   The number of projects recorded during the third quarter to the end of September was down 25 percent on the previous quarter.   Take out the freakishly-large HS2-related work, and the value of those projects was down by 20 percent against the previous quarter.

August 2017 was an incredible high.   But like all highs, a low is bound to follow.   And the coming down in September feels less like a return to what is becoming a new norm, and more like plummeting off the cliff’s edge.

Quick review of BCLive table for September 2017

258no companies were detailed as winning new contracts during September 2017

468no new construction orders are detailed on BCLive

Galliford Try secure overall top spot with £269.7 million of new work

New order winners in £1M to £5M category & the £1M and under category went to Morgan Sindall

Morgan Sindall Group also secured the most number of new construction orders in the month with 16no