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Great divide returns

Industrial projects are boosting order books for firms in the North while Southern firms struggle

THE YEAR-end figures from Glenigan for contracts awarded provide little to sing about, particularly for contractors in the South East.

In what looks like a mini rerun of the early 1990s recession, a north/south split has emerged.

Contracts awarded in the South-East, outside London, and East Anglia dropped by more than a third, with all sectors except commercial being badly hit.

The picture in London although the value of contracts let decreased was notably better as a result of a strong performance from the commercial sector, in which contracts were up by a third. The only really bleak spot in London was housing.

The Midlands and Yorkshire and Humberside also saw a decline in contracts awarded.

But further north there was an increase, buoyed by strong industrial spending particularly on the three high-tech factories which have helped boost Sir Robert McAlpines order books.

The City of London is once again seeing substantial offices being built or refurbished. The prize job went to Wimpey for a new head office for Banque Paribas.

Meanwhile, Laing Management won a 26-month contract from Kajima for offices off London Wall, and Kyle Stewart took the main contract for Helical Bars 35 million-plus Old Broad Street development.

The return of mega commercial projects on the scale of Bluewater Park and Dumplington underlines the increase in confidence in the commercial sector.

And the spattering of other major commercial developments although slightly smaller suggests the upswing in confidence is fairly widespread.

The letting of these large commercial contracts, big industrial jobs and big power station schemes will help to provide some longer term stability for the winning contractors.

And the increase in contracts coming on to contractors order books in 1994 will still be feeding through, providing work on sites for firms around the country. But the decline in contracts being let and the sharper decline in work going out to tender is an obvious concern for firms in the industry.

This goes a long way towards explaining why the forecasters are predicting the current recession will last through most, if not all, of this year.

The data for the graphs has been supplied by the Glenigan Group, 41- 47 Seabourne Road, Bournemouth, Dorset BH5 2HU.

Figures used for the graphs are in million at current prices