With the first full month of post-Brexit figures in the books the value of commercial office contracts jumped by more than 20% to over £600 million during July. However, the infrastructure sector experienced a decline, with the value of contracts for July decreasing to £1.5 billion, a drop of 20 per cent compared to June based on a three month rolling average.
According to the August edition of the Economic & Construction Market Review from industry analysts Barbour ABI, construction new orders were down to £5.8 billion in July, a month on month drop of £400 million. Along with infrastructure, the other prominent sector in construction was residential, which saw a decrease of seven per cent in contract value and a drop of 2,000 units compared to the previous month.
But it wasn’t all doom and gloom for the industry, as the value of contracts for commercial office construction in July increased by 22 per cent compared with June, worth a total of £648 million on the month. £250 million of that total came from the West Midlands development Paradise Circus, an eight storey office block.
The Industrial sector also performed well in July with its value the highest it’s been so far in 2016, reaching £564m, greatly helped by the commissioning of Reckitt Benckiser £100 million new global centre for scientific excellence in Kingston upon Hull.
Michael Dall, lead economist at Barbour ABI, said: “In the first full month since the vote to leave the European Union, the value of construction projects reaching contract award stage declined in July. This is unsurprising given the uncertainty in the economy. However, it is the infrastructure sector which has performed particularly poorly this month and with the change in narrative from the current Government, it puts more emphasis on any fiscal stimulus that they may be planning to make.”