October contracts drop by 5%

The value of construction contracts awarded in October fell 5% on September’s inflation-adjusted figure, from 114 points to 108, according to the new index developed by the Construction Products Association (CPA) and Barbour ABI.  

The index, which measures the value of contracts under £250m awarded in the industry and was launched exclusively by Building last month, works from a benchmark of 100 points in January 2010.

The retrenchment seen in the public sector was echoed by private businesses, with many investors choosing to see how the global economy fares before committing funds.

Kelly Forrest, senior economist at the CPA said the effects of the eurozone crisis were beginning to be felt in construction: “The private sector has reacted quickly to the deterioration in the economic outlook for the UK and the escalation of the eurozone crisis,” she said. “Businesses are clearly thinking twice and opting to wait and see how the situation unfolds before choosing to invest.”

Private housing work dropped off in October, but the social housing index held up comparatively well as the Homes and Communities Agency progressed with awards under the Affordable Homes Programme.

Meanwhile, in the league of top performing contractors, Balfour Beatty came out top in October with 61 contracts worth a combined £235.2m. The firm rose from fourth position last month after wins including the £16m Thetford Academy for Norfolk council, and a £77.6m motorways contract covering the M4 and M5.   

School building also boosted Bam Construct, which moved to second place from seventh on the back of school projects including Aylesbury Vale Academy and Berryfields Special School, a £21.8m contract.

For full interactive league tables visit www.building.co.uk/barometer