The figures for the UK construction industry in 2015 paint a seemingly contradictory picture. Depending on which area you focus on, we can say that it was both the best and worst of times. The overall number of construction projects fell over the year, yet the value of those projects rose significantly. We view this as an indicator of the change in dynamics across the UK construction industry.
When the construction industry figures for 2015 were released there was initial concern around the number of contracts engaged. The reported figure for 2015 was 11,857, which is around 95% of the 2014 number of 12,440 contracts. While there was some speculation that this was a sign of a slowdown in the sector, the value of those contracts give a different perspective. The overall value of construction contracts in 2015 rose by 15.5% on a year-to-year analysis, with the figure rising to £74 billion compared to the £64 billion reported in 2014. The combination of a lower number of contracts with a higher value saw the average net worth of each construction contract rise by 21%, from £5.1 million in 2014 to £6.2 million in 2015.
It is essential to take all these factors into consideration if we are to reach a clear understanding of the current condition of the UK construction industry. Rather than focusing on either the fall of contracts or the rise in value, it would be more appropriate to see the figures as a reflection of a change in the nature of work currently being undertaken. While in isolation the fall in overall contracts is a matter which must be monitored, the financial rise indicates an increase in larger size projects being commissioned.
Exactly what bearing the 2015 figures shall have on 2016 remains to be seen. On a national perspective, however, it remains the case that there is still a great deal of pressure on the construction industry to deliver the new builds and renovation work our society needs to cope with a growing population and expanding economy. From our perspective, we are looking forward to facing the challenges which this year will bring, and we have every confidence in delivering our work and services to the many projects underway.