£2.3bn Surge in Construction Contracts in October

In October the residential sector unexpectedly reached a huge £2.3 billion worth of construction contracts for the month.

This was despite the sharp falls in the construction industry after the immediate aftermath of the Brexit vote.

The November edition of the Economic & Construction Market Review from industry analysts Barbour ABI states that the residential sector monthly contract value rose by 34% in October in comparison to September.

Builders Persimmon and Taylor Wimpey both also registered growth in its order books, with the former reporting a 19% increase in sales rates.

In construction overall, contracts were up in October reaching £5.9 billion, which is an increase of 5% on the previous month.

However, a number of sectors are yet to recover from the Brexit vote slump in the same way that the residential construction industry has – particularly in infrastructure, with contract values down by 42% in October compared with the same time last year.

Since the July referendum, Commercial & Retail, Industrial and Medical & Health have also struggled to get some momentum going.

Lead economist at Barbour ABI, Michael Dall, said that the turnaround for housebuilding in October will give industry leaders, investors and the government much needed breathing space.

Dall added: “However, the majority of the other construction sectors continuing to lag after the post-Brexit vote is a cause for concern, particularly infrastructure and commercial & retail, two sectors that are usually accurate indicators of how the overall economy is performing.

“Housebuilding now beginning to thrive is no major surprise, as the strain on housing stock and government targets have become a matter of national attention.

“What did actually surprised was the significantly large value of residential construction contract this month, reaching £2.3 billion, the highest monthly figure ever recorded for residential construction since Barbour ABI reporting began back in October 2010.”


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