Wednesday, October 2, 2019

Latest update from Builders' Conference CEO Neil Edwards

Neil Edwards

A False Alarm?

BCLive league table bounces back after August downturn.  But is this a return to form or merely a last-minute push to secure work before the Brexit curtain falls?   Builders' Conference CEO Neil Edwards reports.

Those of us - and we count ourselves among this number - that raised the alarm about the immediate future of the UK construction sector last month may have done so prematurely.   At least for now.   For while the industry continues to be racked with uncertainty and trepidation, the value of contract awards recorded in September 2019 not only saw a return to form for the sector; it actually redressed the deficit experienced last month.


More than 300 individual companies shared 544 projects between them, pushing the monthly total on the BCLive league table to an unexpected and unseasonal total of more than £6.4 billion.   And while that total was skewed by a single £1 billion contract award, September 2019 still delivered an above average level of demand compared to almost the whole of the past 19 months.  The month also saw the infrastructure sector challenge housebuilding's position as the perennial contributor of the most work, while several geographic regions experienced a welcome upswing in demand.


September was particularly notable for Balfour Beatty which claimed the number one position on the BCLive league table as part of a joint venture with Vinci and took the second position as a stand-alone entity in its own right.


That chart-topping joint venture deal was a £1 billion award from HS2 for the construction of a new railway station at Old Oak Common, Willesden which has been undergoing demolition and preparation for more than a year now.   It is not yet known how responsibilities will be divided between the joint venture partners.   But the new build will include six underground platforms and as many as eight on the adjacent Great Western main line.


Balfour Beatty also claimed the number two position, primarily because of a single £638 million refurbishment and repair contract for Lincolnshire County Council.   That contract is a six-year highways contract that starting in April 2020 and will include road and pothole repairs, winter maintenance, signs, road markings and the cutting of grass verges.


Taking third position is Mace which picked up four new contract awards with a combined value of £418.5 million.   The largest of these is a major mixed use development at Nine Elms Square in south west London, in the shadow of Battersea Power Station.   Valued at £400 million, that contract calls for the construction of a cluster of towers including one 46 and one 36 storey further 10 of between seven and 29 storeys.   The client is R&F Properties.



Lendlease, the company that currently sits atop the BCLive rolling year table with a remarkable £5+ billion haul, took the number five position with three new contract awards.   This includes a £170 million new build prison at HMP Glen Parva in Leicestershire that had previously been awarded to another contractor.   The contract includes the demolition of the existing Glen Parva Youth Offenders prison and will ultimately accommodate 1,600 male inmates.


Kier Group won the most new contract awards (18) for a combined value of £151.9 million that includes a £39 million office new build for Durham County Council at The Sands, Freemans Lane in Durham.


In a month in which each of the top 14 companies on the BCLive league table won contract awards valued in excess of £100 million, other notable contracts included a £100 million flood defence project for Portsmouth City Council won by VolkerWessels; and a £130 million new build mixed use development for Hull City Council won by Vinci.


As a stand-alone sector, housing once again took the top spot with a combined monthly total of £1.84 billion.   However, with railways contributing just over a billion pounds and roads adding another £800 million, the infrastructure sector enjoyed its best month for some considerable time.


Regionally, London topped the £2 billion mark to stay on the top of the heap yet again.   However, with £1.1 billion, the East Midlands enjoyed an incredible month to finish second while Yorkshire £329 million came a distant third.


Of course, while August’s lowly total may have proved to be a false alarm, we are now just a matter of days from what looks set to be the final deadline for Brexit.   Maybe September will prove to be a show of resilience and resistance by a construction sector that has grown tired of waiting for the politicians to sort themselves out.   Or maybe August will have been just a forewarning of an approaching storm.


One thing for sure, the BCLive league tables for October and November will make for very interesting reading indeed.

Quick review of BCLive table for September 2019

  • 330 no companies were detailed as winning new contracts during September 2019
  • 544no new construction orders are detailed on BCLive
  • JV between Balfour Beatty & Vinci Ltd secure overall top spot with £1 billion order
  • New order winners in £1M to £5M category went to Kier Group and the £1M and under category went to Russell Cawberry Ltd who are based in Surrey.
  • Kier Group had the most number of new construction orders in the month with 18no.

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