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Construction contracts shifting away from London

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Construction contracts shifting away from London

Construction contracts shifting away from London
June 28
09:00 2017

According to reports, construction contracts on major regeneration and infrastructure projects have shifted from being highly concentrated on London and the South-east to a more even spread across the country. Previously, London dominated the list of hotspots where the value of construction contracts was highest, according to Barbour ABI  and the Construction Products Association. But the construction industry analyst found that last year investment in housebuilding, infrastructure and commercial property is increasingly spread across the UK.

Scotland and the West Midlands had the highest growth in value of contracts last year. In the capital the total value of contracts awarded there was £13.1bn last year, down 14.6% on 2015. Just three areas of London appeared in the top 10 places with the highest-value construction contracts.

The report pointed to Birmingham as being a particular hotspot, as levels of investment in infrastructure, commercial and residential property are all above long-term averages, boosted by its location on the HS2 route.

This spread of investment can partly be explained by specific injections of cash: for example, the Scottish region of Inverness & Nairn and Moray, Badenoch and Strathspey enjoyed a 471% increase in contract value as work started on a wind farm there.

Michael Dall, an economist at Barbour ABI, said: “The Government is focused on raising the levels of major infrastructure projects, in particular public sector schemes such as offshore wind farms, energy plants and motorway upgrades have considerably boosted construction value in more rural regions.

“Districts such as the Isle of Anglesey and Norwich and East Norfolk have experienced year-on- year construction contract value growth of 916pc and 744pc respectively.”
The report also found the nation’s coldspots, where investment into construction projects is well below average, were the result of a slowdown in housebuilding in the South-east, Yorkshire & Humber and the East Midlands.

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