Quarterly construction contracts data reveals a £6.6b award value in Q1 2024.
- UK public sector construction contracts increased by 14% in both volume and value this quarter.
- Network Rail Infrastructure awarded the highest value contract worth £1.1b to McLaren for York Central.
- Transport contracts recorded the highest average value, although fewer in number.
- 278 construction contracts were executed via frameworks, representing 8% of the total award value.
In the first quarter of 2024, the UK Government awarded a total of 2,021 construction-related contracts, culminating in an impressive value of £6.6 billion. This constituted a notable 14% increase compared with the previous quarter, attributable to increments in both the volume and value of contracts conferred.
The preeminent contract for this quarter was awarded by Network Rail Infrastructure to McLaren, amounting to £1.1 billion for developments at York Central. This surpasses the previous quarter’s largest contract by a significant margin, which was £575 million awarded by A2 Dominion Group to Mears, underscoring the variability in contract values from one quarter to the next.
While the construction sector’s contract values display dynamic shifts, the average quarterly figure for contract volumes remains relatively stable at 2,195. It is important to note that a delay in the publication of contracts tempers the full visibility of the complete volume and value of Q1 until the subsequent quarter.
Local government emerged as a significant player, issuing the highest volume and value of construction contracts, totalling £2.6 billion across 1,194 contracts, accounting for 39% of the overall construction contract values awarded by the UK public sector during this quarter.
Central Government awarded contracts valued at £1.4 billion, with the volume being considerably less than that of local government. Notably, contracts within the transport sector exhibited the highest average value of £275 million, a reflection of the low volume but substantial value of contracts in this domain.
McLaren, through their work at York Central, topped the supplier rankings in Q1, while Network Rail Infrastructure was the principal buyer. Following them, the Northern Ireland Housing Executive distributed the second highest value contract of £604 million to five suppliers for various projects, along with a £36 million contract to P.K. Murphy Construction.
Birmingham City Council ranked third in procurement, primarily driven by a £603 million contract granted to Equans and Fortem Solutions for city-wide repairs and maintenance over two years. The Department for Education followed with 29 contracts valued at £419 million, the most substantial being £48.4 million awarded to Kier for school construction projects.
During this period, 278 construction contracts were activated via frameworks, totalling a value of £505 million, accounting for 8% of the overall award value, a decrease compared to the previous quarter. The most significant framework call-off was driven by a £45 million contract for a trust capital programme awarded to Robertson Construction by Newcastle Upon Tyne Hospitals NHS Foundation Trust.
The construction works and services framework headed by CCS, covering a broad spectrum of works, led the framework awards. The Hyde Housing Association’s main contractor framework agreement was closely behind, facilitating a £33 million contract to Bugler. Meanwhile, the collaborative delivery framework by CCS maintained substantial call-offs including an £11.6 million contract for a River Roding project.
In terms of opportunities, there were 1,862 Prior Information Notices (PINs) with a cumulative value of £37.7 billion issued in Q1, indicating prevailing high-value prospects in the construction sector. Despite relatively stable volumes averaging 1,916 PINs over the past year, these figures affirm the construction domain as yielding consistently rewarding opportunities.
The first quarter of 2024 showcased a prominent rise in government-conferred construction contracts, characterized by substantial values and strategic public sector partnerships.
