The CPA/Barbour ABI Construction Index is based on Barbour ABI research on contract awards. The Index is adjusted to take account of seasonal variation. It is based on actual contract value on a 3 month moving average.
Commercial offices sector index: sharp falls ahead
By Noble FrancisTaking a look across the skyline in London, Manchester and Birmingham, there’s a raft of towers under development and it’s hard to believe that new commercial offices contract awards have fallen so much over the past year. But there tends to be a 12-18 month lag between contracts for new high-profile office space and the construction activity on the ground. So, work on site now is still based on projects signed up to before the EU referendum. While the vote to leave the EU has not yet impacted on most construction sectors to a large extent, it has had an impact on up-front investment in high-profile towers, particularly from international investors. And, as the projects signed up to pre-referendum finish, there certainly are not enough projects to maintain activity on the ground, which has already started to fall and is expected to fall in both 2018 and 2019. The CPA/Barbour ABI commercial offices contracts awards index was 34% lower than one year ago. Activity on site still remains high by historic standards but, given this fall in new contracts of more than one-third, we should expect double-digit falls in offices activity this year and next.