London was one of the few regions which managed to avoid the worst of the construction slowdown in 2008.
Analysis by Glenigan recorded the value of underlying work starting on site fell by just 4 per cent in 2008.
However, as the credit crunch continues to hit hard on London’s finance and business service industries, it is almost certain that private sector construction prospects will suffer. The value of underlying planning approvals in the region has also fallen sharply across the offices, retail and hotel and leisure sectors.
Glenigan also predict that 2009 will see a sharp drop in the value of underlying work starting on site. This is based on a fall in the value of underlying planning approvals, combined with a growing number of projects being placed on hold.
Looking forward there are some positive projects which are expected to boost construction in the city. London is already benefiting from preparations for the 2012 Olympics. The £303 million Aquatics Centre began in July, and the Velopark, the latest high value stadia project, is due to start on site.
Private housing construction in the region has been hit hard by tighter mortgage conditions and sustained pessimism in the residential housing market. Information recorded by Glenigan shows that the value of underlying construction starts during the first four months of 2009 was 65 per cent down on a year earlier.
A prominent part of construction activity in the Capital is large projects. On the surface the pre-construction pipeline looks good but the current economic climate it is likely that a bigger proportion of planned large projects will be delayed of abandoned. Two big projects which should boost activity in the region include Crossrail (£16 billion) and Heathrow East (£350 million for phases 1 and 2).
As a whole Glenigan predict a 23 per cent decline in underlying construction starts in 2009 and it is hoped that a continuation of key large projects combined with the impact of London 2012 will soften the blow to some parts of London’s construction industry.
Client Focus: Network Rail
Major Project: £275m reconstruction of Blackfriars railway station and bridge as part of the £5.5 billion government funded Thameslink investment managed by network rail. The first step of Stage One, demolition, commenced October 2008. Stage Two, commences in 2009 with a completion date at the end of 2011, by which time Blackfriars will have been completely rebuilt.
Past Activity: In the past two years and including 2009 ytd Network Rail has been involved in 14 projects in London alone with a combined value of £2,913 million. Major projects for 2009 include £800m track enhancement works across Central London.
Latest News: Tenders have been returned for a £600m high output framework contract for a rail maintenance project. The scheme is expected to last 84 months and works include both the planning and delivery of plain line track renewals.
Contractors they have awarded work to: Bellwinch Homes, Geoffrey Osborne.
Contact: 020 3356 9595, www.networkrail.co.uk
Top Clients for London
|Client Name||Contracts awarded in 2009 year to date|
|No of Projects||Value (£ million)|
|Sellar Property Group||1||400|
|London & Continental Railways Ltd||1||350|
|Network Rail Infrastructure Ltd||5||365|
|HM Customs & Excise||1||300|
|London Borough of Hackney||4||271|
Top Contractors for London
|Client Name||Contracts awarded in2009 year to date|
|No of Projects||Value(£ million)|
|Balfour Beatty Rail||2||1,075|
|Interserve Project Services||4||411|