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Construction struggles as housebuilding takes a dive

The value of new construction contracts in April reached £4.9bn, a drop of 6.8% compared to March

The decline coincides with a housebuilding slump that saw a drop of 15.3% compared to the previous month and a wavering infrastructure sector that has performed poorly so far in 2018.

The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI highlights levels of construction contract values awarded throughout the country.

Across the construction industry, the medical and health sectors posted the highest monthly value for projects for more than two years, at £229m. Hotel, leisure and sport saw an increase in contract value for the third month in a row. Commercial and retail and education both saw declines in contract values, down 10 and 9.3% respectively.

Regionally, London was the region with the largest share of contract awards value in April, with 20.3% of the total, and including three of the largest top ten projects throughout April. The capital was then followed by the East of England with 16% and the South East with 11.3%.

Commenting on the figures, Michael Dall, Lead Economist at Barbour ABI, said: “April is a reminder for the industry that when both infrastructure and in particular housebuilding falter, construction figures will by far and large decrease.

"Other sectors had more of a successful month, such as medical and health construction, however due to the scale and size of infrastructure and housing construction, it’s an overwhelming task for other segments of the industry to make up the sizeable difference.”