Infrastructure contract awards have risen 125%, with approvals up by 113% and applications by 22%
The most recent Barbour ABI industry analysis has seen a rebound this month, with overall contract awards rising by 33% to £6.8bn in June.
Infrastructure led this recovery, far outweighing the negatives brought by the residential sector, as infrastructure enjoys the £275bn investment into public infrastructure set by the Spending Review.
June saw £2.2bn in infrastructure orders
This is the highest monthly total since February, and a whopping 125% increase from July, and has risen thanks to a diverse range of projects rather than one single major project such as HS2.
The 113% rise in approvals is largely in thanks to the Ossian Offshore Wind Farm, and two major battery storage schemes in the West Midlands, with a total value of £210m, account for the 22% boost in planning applications.
On the flip side, the residential sector is still struggling with a meagre 5% rise in awards in June, up to £1.75bn, below the 2024 average, with the highest value residential scheme being a £125m mixed-use project on Chalk Farm Road, London, combining student accommodation with private flats and commercial space.
New residential applications also fell in May by 33% from the previous month.
Still, this was not enough to offset the growth as the total value of planning approvals rose by 34% to £10.92bn, despite a 19% drop in the value of new applications.
Infrastructure is set to continue with strength with frameworks such as Transport for London’s infrastructure improvement framework being announced at the end of last month.
“These are exactly the kind of figures Keir Starmer and Rachel Reeves will want to see”
Ed Griffiths, chief analyst at Barbour ABI, said: “Following the spending review, these are exactly the kind of figures Keir Starmer and Rachel Reeves will want to see after a challenging few weeks in parliament. Given how heavily infrastructure featured in the review, all eyes will be on whether this marks the beginning of a sustained period of growth.
“There are signs of future momentum for high-rise residential, particularly with responsibility for the Building Safety Regulator now sitting directly under DLUHC,” said Griffiths. “This could help accelerate progress on schemes delayed by post-Grenfell safety requirements. Our data shows some projects delayed by up to nine months, likely due to the impact of the Building Safety Act.
“The Deputy Prime Minister’s £39bn investment plan to deliver 300,000 social homes is encouraging, but as ever, targets and delivery are two very different things. Whether the UK has the capacity to build at this scale remains an open question.”
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