Contract awards have returned to above historical average levels for the first time since September 2020.
In March 2021, contract awards increased by 22% compared to February to £5.8 billion, according to industry analysts Barbour ABI.
The experts say the main change in activity was a very large increase in the hotel and leisure sector.
The latest edition of their Economic & Construction Market Review, highlights levels of construction contract values awarded across Great Britain.
Sector analysis shows that Residential contract awards remained stable in March at historical average levels, after picking up in February. Activity was £2.0 billion in the month, compared to £1.9 billion in February and £1.6 billion in January. Over 2020, residential contract awards averaged £1.7 billion.
The hotel and leisure sector contract awards value reached £1.0 billion in March as the planning approvals activity converted to contract awards.
Commenting on the figures, Tom Hall, Chief Economist at Barbour ABI and AMA Research said, “After a weak recovery over the second half of 2020 and the beginning of 2021, March saw a definite improvement across the planning environment. Importantly increases were seen in the commercially sensitive sectors of hotel and leisure in contract awards, and residential and commercial in planning approvals.
However, this is only one month of improvement and the planning environment is notoriously volatile. The catch-up of “lost” contract awards since the start of the pandemic amounts to some £15bn of projects, or around 20-25% of the annual contract award value. We would therefore expect a significant amount of catch up over the next couple of months as the economy reopens to strengthen a currently weak construction pipeline.
All things equal this is some much-needed positive news for the sector after an exceptionally challenging 12 months.”
Download the full report here.