The number of major construction sites heading back to work has climbed again to 86%. Build UK has revealed that the volume of sites opening up has risen by 4% in England and Wales in just over a week as the industry gets back to work.
The trade body covers some of the biggest names in the business including McAlpine, Balfour Beatty and BAM and is reporting that, despite social distancing guidelines, productivity is improving with output at 75%. Contractors are also bringing workers out of furlough, protecting jobs in civil engineering and trades. The furloughed number has fallen from 30% to 22% in the last four weeks.
However, whilst sites in England and Wales are looking forward to post lockdown, only 19% of projects are currently up and running in Scotland with output at just 22%.
Business is booming
Meanwhile, the value of new construction contracts signed during lockdown has leapt by 50%. New contracts worth £9.7bn were signed in April, despite the major shutdown of sites and workers furloughed or working remotely. That figure was up 20% on the previous months and 50% on the contracts signed in April 2019.
The figure was substantially boosted by two mega contracts for infrastructure upgrades to the rail network and highways. Worth £3.7bn, they will secure jobs in civil engineering as well as significantly improving the rail and road network.
Both contracts involve BAM Nuttall which signed a £2.2bn contract with Network Rail to upgrade the Transpennine route between Leeds and Stalybridge. As part of the BAM Nuttall Morgan Sindall Joint Venture (BMJV), it secured a £1.5bn contract with Highways England to be involved in the smart motorways framework. This will install message boards and create all lane running of motorways over the next 10 years.
Other winners include Mace which has finally been confirmed as the project manager for the £482m development 40 Leadenhall and Domus Construction which signed contracts worth £400m for developments in Manchester.
Infrastructure green shoots
With 50% of contracts awarded falling to projects in the infrastructure sector, there is reason for cautious optimism once the lockdown officially eases. Neil Edwards, CEO of Builders Conference which compiled the figures, said they offered a glimmer of optimism but the challenge would be to convert contracts into actual construction works.
But he also sounded a note of caution for the post Covid-19 world. Concerns still exist about the availability of materials in the face of fragile supply chains and ongoing travel bans. The existing skills shortage could also be compounded by social distancing measures including staggered returns to work. Expired competence cards will need updating, creating a training lag.
However, despite concerns that the number of tender opportunities is decreasing, construction companies continue to land contracts as the lockdown shows signs of finally easing. Laing O'Rourke has been appointed preferred bidder for a £160m residential block in Greengate, Salfords. Highways England has also secured planning consent for its planned £282m improvement project for the M42 near Birmingham Airport.
With the value of new construction contracts rising month and month throughout lockdown, can Britain build its way to recovery?