Component Developments Construction Market Overview, July 2017

Component Developments have analysed and summarised the performance of the industrial, medical, educational and leisure industries during the period July 2017. Comparing the contract award levels with the activity in June 2017, and also with previous years allows patterns and trends to be discovered. This leads to further understanding of what may happen in the upcoming months, and can be used by all companies to help further development.

Hotel, Leisure and Sport.

Contract award levels were 13.4% lower than May, and 0.5% lower than June 2016. In the three months to June the value of contracts was £1.3billion, which was 42.6% lower than the previous three months. This was an increase of 20.9% compared to the same period in 2016 indicating that while there have been recent falls there is evidence of longer term improvement in the performance of the sector. The South East was the main location for hotel, leisure and sport contracts this month, accounting for 30.5% of the value awarded.

Whilst there have been recent falls there is evidence of longer term improvement in this sector.

Industrial.

Activity in the industrial sector increased in June with a value of contracts awarded £508 million, based on a three month rolling average. This equates to a rise of 30.8% on the value in May, and is 7.8% above the figure recorded this time last year. The East Midlands is the region with the highest value of activity this month, with 24.8% of the contracts awarded. The East of England had the next highest portion of contract awards accounting for 21.8% of the value awarded in June, lower than the 26% figure in the corresponding month in 2016.

The types of project awarded in the sector were mainly in warehouse/storage which accounted for 55% of contract values, which is the same as the proportion in June 2016. This is followed by laboratories/research and development which accounted for 15% of the value.

Medical and Health.

Levels of activity in the medical and health sector increased by 27.8% in June 2017 compared to May, with the total value of contracts awarded £100 million based on a three month rolling average. This is 27.8% higher than the values in June 2016. London dominated the sector this month, capturing 40.3% of activity which is a substantial increase from the 2.2% share in June 2016. This is primarily due to the award of the private medical contract at the London Clinic in Marylebone valued at £25 million.

Education.

The value of contracts awarded in the education sector was £473 million in June based on a three month rolling average, a 2.4% decrease from May. This figure was 29.4% lower than June 2016 indicating more subdued activity levels at present. The values of contract awards in the three months to June were 8.5% lower than the same period last year however, indicating poorer long term performance in the sector.

The South East experienced the highest share of the value of education contracts in June accounting for 17.7% of contract value awarded; however the figure is 21.3% lower than June 2016. College and University contracts were the dominant sub sector in education in June, they accounted for 36% of the total value awarded, up 6% from June 2016.