East Anglia: Region leads the way for growth in industrial construction contracts

Michael Dall, lead economist at Barbour ABI Michael Dall, lead economist at Barbour ABI

Thursday, August 21, 2014
11:04 AM

The East of England saw a surge in the value of construction contracts in the industrial sector last month, with the region accounting for near half of the UK total.

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The latest Economic & Construction Market Review compiled by Barbour ABI, which supplies construction data to the Office for National Statistics, the Cabinet Office and the Treasury puts the value of industrial construction contracts in the region during July at £180million.

This represents 44.4% of the value of all contracts awarded for the sector UK-wide and an increase of 40.2% compared with July 2013.

Michael Dall, lead economist at Barbour ABI, said: “Industrial construction activity in July was at its highest since Christmas, and the East of England was right at the forefront of this growth.”

The level of growth in the East was largely down to the award of a £140m contract for Gateway Park, a 240-acre distributino park in Peterborough, but the regional total also included a significant level of activity across the logistics sub-sector.

“Warehouse and storage projects were the most predominant in the industrial sector last month, accounting for 58% of contract value in July, and this doesn’t look set to change as long as sites such as the one in Peterborough are still ripe for development,” added Mr Dall.

The East also saw growth in a number of other sectors, helping it to account for 11% of the total value of all construction contracts awarded in the UK in July, behind only London and the South East.

In the education sector, the East saw the biggest year-on-year increase in the value of contracts anywhere in the UK, with the total 6.4% higher compared with July 2013 and representing 11.8% of the national total, behind only London and Scotland.

Residential contracts in the East were up 2.4%, representing 7.2% of the total, and infrastructure contracts in the region were 1.8% higher, accounting for 7.8% of the total.

However, in contrast with the growth in industrial contracts, the value of commercial and retail sector contracts in the region was 4.6% down on July 2013, with the region’s share of 3.8% being the joint second lowest in the country.

The value of contracts in the region also fell in the hotel, leisure and sport sector, by 1.1%, with the East accounting for 7.3% of the total, and in the medical and health sector, although by just 0.2%, with the region’s 2.9% share of the total being the lowest in the country.

Nationally, the value of construction contracts was up 4.8% year-on-year last month, although output in the sector remains 10.3% below the pre-recession peak reached in 2008.

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