Housing and infrastructure grow but rest of construction struggles in 2016, say industry analysts Barbour ABI

At £70.6 billion, the overall value of construction contracts awarded in the UK fell five per cent in 2016 when compared with the previous year but housebuilding continued to grow, the latest research reveals.

With a total value of contracts at £23.6 billion, housebuilding increased by 11 per cent year-on-year, according to the Economic & Construction Market Review from industry analysts Barbour ABI.

Planning activity increased with project values up 19.2 per cent to reach an advanced planning stage of £49.8 billion, while infrastructure - which had nine of the top ten highest value construction contracts of the year - increased by 1.9 per cent to hit £19.3 billion.

However, the industrial, medical and health, education and commercial, and retail sectors saw a decrease in contract value in 2016, with retail falling by 32.6% compared to 2015 figures.

Michael Dall, lead economist at Barbour ABI, said: “It is clear from our yearly figures that the housebuilding sector was the main component of growth across 2016.

"Even after the initial shock of the Brexit vote, where many housebuilders share prices fell in excess of 20 per cent, this did not hamper activity with both the current and future pipelines of work remaining strong.”

“However infrastructure cannot be overlooked, with nine out of 10 of the biggest projects across all of construction coming from this sector. Overall for Construction in 2016, output remained healthy but contract award values did decline.

“With important political decisions likely to come in 2017 that could have implications on construction activity, particularly in the commercial sector, it would seem that the future will be difficult to predict, as Britain’s trading position remains unclear for now.”

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