Construction Contractors Market – Activity & Opportunities – UK 2020-2024

This report provides a review of the UK Contractors Market and also details the procurement of construction projects, and provides details on the supply chain.

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The 4th Edition of the Construction Contractors Market Report forecasts contractor’s output in the sector to 2024. The Report reviews the activities, sector capability and strategy of the leading 50 Tier 1 contractors in the UK and provides a comprehensive review of the opportunities in the construction market in the UK.

Key issues covered in the report include:

  • Structure and size of the UK contracting industry sector
  • Analysis of key market sectors within the contracting industry
  • Analysis of the regional contracting market in terms of contractor and sector strengths
  • Analysis of key market strengths of the top 50 Tier 1 contractors operating in the UK
  • Analysis of the performance of the contracting industry including structure, size, market segmentation and market strengths
  • Key market trends and the impact of Brexit on workloads on contractors with a focus on capacity issues, tendering, market consolidation and a shortage of skilled trades
  • Market forecast for the Industry over the next few years including contractor focus and sector strategy

Areas of particular interest:

  • In terms of future opportunities in the contracting sector, we include an in-depth analysis of the planning pipeline to 2029 for key market sectors (schools, higher education & PBSA, healthcare, transport and utilities infrastructure; industrial; commercial office; retail and entertainment, leisure and sport detailing the size and value of each pipeline
  • Detailed review of leading contractors across 9 major sectors, including schools, higher education & PBSA, healthcare, transport & utilities infrastructure, commercial office, industrial & warehousing, retail and entertainment, leisure & sport
  • Analysis of key capital building programmes and frameworks across 9 major sectors, including schools, higher education & PBSA, healthcare, transport & utilities infrastructure, commercial office, industrial & warehousing, retail and entertainment, leisure & sport
  • Analysis of spending across the Government’s Construction/Infrastructure pipeline. Analysis of regional/sector spending over the next few years to 2021 and beyond
  • Detailed assessment of new non-residential construction output across all major sectors together with estimated forecasts for growth over the next few years to 2024
  • Analysis of change, diversification and consolidation within the contracting industry as firms address the legacy of Government austerity cuts on workloads and order books and address the key issues of contractor margins and the impact of Brexit on future workloads
  • The Report also reviews the progress of major national and regional construction and civil engineering frameworks and detail key contractors appointed

Some of the companies included:

Ardmore Construction, Balfour Beatty, BAM Construction Ltd, Costain, Galliford Try, Interserve, ISG, Kier Group, Laing O’Rourke, MACE, Morgan Sindall, Sisk, Wates Construction Ltd, Willmott Dixon.


Review of the Contracting Industry in the UK

  • Total Construction Output to 2024; Non-residential construction Output by Sector
  • Non-Residential Construction Output by Sector
  • Government Construction Pipeline to 2027-28
  • Construction Projects – Development Pipeline to 2029
  • Regional Construction Development Pipeline (High Level View)
  • UK Construction Industry – Budget & Spending Review Announcements
  • Impact of Brexit on the Construction Industry
  • The UK Contracting Sector: Structure; Merger & Acquisition Activity; Skilled Trades
  • Construction Contracts Awarded: Value and Number of Contracts Awarded 2016-2019
  • Contracts Awarded 2019 by Sector
  • Overview of Contractor Strength & Capability
  • Specification and Procurement Issues – Procurement after PFI
  • National Contractor Frameworks: SCAPE; Pagabo Major Projects Framework
  • Regional Contactor Frameworks: NACF Frameworks
  • Regional Concentration of Contracts/Workloads
  • Regional Concentration of Contractors

Review or Contractor Opportunities by Sector

 

Education

  • Education Construction Output: Key Summary Data
  • Schools’ Sector Construction Pipeline
  • Key Frameworks/Construction Programmes in the Schools Sector
  • Leading Contractors in the Schools Sector – By Contract Awards
  • Universities/Higher Education Construction Output: Key Summary Data
  • Universities/Higher Education Development Pipeline
  • Leading Contractors in the Higher Education Sector – By Contract Awards

Healthcare

  • Healthcare Construction Output: Key Summary Data
  • Key Frameworks/Construction Programmes in the Healthcare Sector
  • Healthcare Sector Construction Pipeline
  • Leading Contractors in the Healthcare Sector – By Contract Awards

Infrastructure – Transport & Utilities

  • Infrastructure Construction Output: Key Summary Data
  • Transport Infrastructure Construction Output: Key Summary Data
  • Transport Infrastructure Construction Pipeline
  • Key Frameworks/Construction Programmes in the Transport Infrastructure Sector
  • Leading Contractors in the Transport Infrastructure Sector
  • Utilities Infrastructure Construction Output: Key Summary Data
  • Utilities Infrastructure Pipeline
  • Key Frameworks/Construction Programmes in the Utilities Infrastructure Sector
  • Leading Contractors in the Utilities Infrastructure Sector

Industrial & Retail Warehousing

  • Construction Output: Key Summary Data
  • Industrial Sector Construction Pipeline
  • Leading Contractors in the Industrial Sector

Commercial Office

  • Construction Output: Key Summary Data
  • Commercial Office Sector Construction Pipeline
  • Leading Contractors in the Commercial Office Sector

Retail

  • Construction Output: Key Summary Data
  • Retail Construction Programmes and Frameworks
  • Retail Construction Pipeline
  • Leading Contractors in the Retail Sector

Entertainment & Leisure Sector

  • Construction Output: Key Summary Data
  • Entertainment & Leisure Construction Programmes and Pipeline
  • Leading Contractors in the Entertainment/Leisure/Sports Sector

The 4th edition of our report reviews the UK Construction Contractors Market, against a backdrop of constrained public sector funding, ongoing Brexit uncertainty and the consequences of the 2019 General Election for construction.

The construction industry continues to face acute labour shortages in specific areas – notably trades such as scaffolding, bricklaying, roofing, carpentry, plastering and plant operatives. In addition, there is an increased demand for non-construction professional, technical, IT, and other office–based staff and a high demand for construction managers and project managers.

Margins remain under pressure in 2019 and 2020 influenced by rising material costs and wage inflation. With competition for construction work increasing, large contractors have been considering small and medium-sized contracts in a bid to maintain workloads and boost finances. This has increased competition with smaller, regional companies who have struggled to compete, leading to insolvencies among SMEs and their supply chains.

Brexit remains a key factor influencing the forecast with the continued uncertainty impacting expansion plans for businesses as well as consumer spending and confidence. This lack of clarity about the future of the UK outside the EU is beginning to have more marked implications for the construction sector particularly in the form of deferred investment levels.

 

 

Contents Listing

1. INTRODUCTION 8
1.1 BACKGROUND 8
2. SUMMARY AND MARKET PROSPECTS 10
2.1 SUMMARY 10
2.2 MARKET PROSPECTS 11
3. CONSTRUCTION REVIEW 13
3.1 CONSTRUCTION OUTPUT 13
3.2 NON-RESIDENTIAL CONSTRUCTION 14
3.3 UK CONSTRUCTION INDUSTRY – BUDGET & SPENDING REVIEW ANNOUNCEMENTS 15
3.4 IMPACT OF BREXIT ON THE CONSTRUCTION INDUSTRY 16
3.5 GOVERNMENT CONSTRUCTION PIPELINE 17
3.6 CONSTRUCTION CONTRACTS AWARDED 20
3.7 DEVELOPMENT PIPELINE TO 2024 22
4. CONTRACTORS REVIEW 25
4.1 EMPLOYMENT 25
4.2 MERGER & ACQUISITION ACTIVITY 27
4.3 LEADING CONTRACTORS 28
4.3.1 Leading UK Contractors 28
4.3.2 Regional Analysis 31
4.4 SPECIFICATION AND PROCUREMENT ISSUES 33
5. REVIEW OF CONTRACTOR OPPORTUNITIES BY SECTOR 37
5.1 INFRASTRUCTURE – TRANSPORT & UTILITIES 37
5.1.1 Infrastructure Construction Output: Key Summary Data 37
5.1.2 Infrastructure Pipeline 38
5.1.3 Key Frameworks/Construction Programmes in the Infrastructure Sector 41
5.1.4 Leading Contractors in the Infrastructure Sector 43
5.2 EDUCATION CONSTRUCTION 47
5.2.1 Education Construction Output: Key Summary Data 47
5.2.2 Schools Sector Construction Pipeline 48
5.2.3 Key Frameworks/Construction Programmes in the Schools Sector 49
5.2.4 Leading Contractors in the Schools Sector – By Contract Awards 50
5.2.5 Universities/Higher Education Construction Output: Key Summary Data 52
5.2.6 Universities/Higher Education Development Pipeline 53
5.2.7 Leading Contractors in the Higher Education Sector – By Contract Awards 54
5.3 COMMERCIAL OFFICE 57
5.3.1 Construction Output: Key Summary Data 57
5.3.2 Commercial Office Sector Construction Pipeline 58
5.3.3 Leading Contractors in the Commercial Office Sector 60
5.4 ENTERTAINMENT & LEISURE SECTOR 62
5.4.1 Construction Output: Key Summary Data 62
5.4.2 Entertainment & Leisure Construction Programmes and Pipeline 63
5.4.3 Leading Contractors in the Entertainment/Leisure/Sports Sector 66
5.5 INDUSTRIAL & RETAIL WAREHOUSING 68
5.5.1 Construction Output: Key Summary Data 68
5.5.2 Industrial Sector Construction Pipeline 69
5.5.3 Leading Contractors in the Industrial Sector 71
5.6 RETAIL 72
5.6.1 Construction Output: Key Summary Data 72
5.6.2 Retail Construction Programmes and Frameworks 74
5.6.3 Retail Construction Pipeline 75
5.6.4 Leading Contractors in the Retail Sector 77
5.7 HEALTHCARE 79
5.7.1 Healthcare Construction Output: Key Summary Data 79
5.7.2 Key Frameworks/Construction Programmes in the Healthcare Sector 80
5.7.3 Healthcare Sector Construction Pipeline 80
5.7.4 Leading Contractors in the Healthcare Sector – By Contract Awards 82
APPENDICES 83
APPENDIX A. ECONOMIC ENVIRONMENT 83
A.1 Overview and Outlook 83
A.2 GDP 84
A.3 Inflation & Interest Rates 84
A.4 Employment & Wages 85
A.5 Household Consumption 86
A.6 Sterling 86

Tables & Charts

TABLE 1: VALUE OF CONTRACTS AWARDED BY SECTOR IN THE YEAR TO NOVEMBER 2019 (£BN) 10
CHART 2: VALUE OF TOTAL CONSTRUCTION OUTPUT 2015-2024 BY VALUE (£BN AT CURRENT PRICES) 13
CHART 3: NON-RESIDENTIAL CONSTRUCTION OUTPUT NEW WORK ANALYSIS BY SECTOR 2019 AND 2024 – % BY VALUE GB 14
CHART 4: NATIONAL INFRASTRUCTURE & CONSTRUCTION PIPELINE 2018-19 TO 2027-2028: INVESTMENT BY SECTOR (£BN) 18
TABLE 5: GOVERNMENT FORWARD CONSTRUCTION/INFRASTRUCTURE PIPELINE 2018-19 TO 2020-2021 AND BEYOND: ANNUAL PROFILE OF INVESTMENT BY SECTOR (£BN) 19
CHART 6: TOTAL VALUE AND NUMBER OF CONTRACTS WON 2016-2019 (£000’S) 20
TABLE 7: TOTAL CONTRACTS AWARDED TO CONTRACTORS BY SECTOR AND VALUE (£M) YEAR TO NOVEMBER 2019 21
CHART 8: VALUE OF CONSTRUCTION CONTRACTS AWARDED BY REGION (YEAR TO NOVEMBER 2019) (%) 22
CHART 9: GB PLANNING PIPELINE (ALL SECTORS) – TOTAL CONTRACTS DUE TO COMPLETE 2020-2024 BY VALUE (£M) AND NUMBER OF CONTRACTS (AS AT NOVEMBER 2019) 23
CHART 10: CONSTRUCTION CONTRACTS IN THE PLANNING PIPELINE BY REGION 2020-2024: (AS AT NOVEMBER 2019) (%) BY VALUE 24
TABLE 11: MAIN PRIVATE CONTRACTORS – BY NUMBER OF EMPLOYEES 2016 AND 2018 25
CHART 12: EMPLOYMENT IN THE CONSTRUCTION INDUSTRY: 2010 – 2019 (YEAR ENDING SEPTEMBER) (£M) 25
TABLE 13: EMPLOYMENT IN THE CONSTRUCTION INDUSTRY BY TRADE (ANNUAL RECRUITMENT REQUIREMENT) 2019-2023 26
CHART 14: REGIONAL CONSTRUCTION MARKET INDICATORS – CONSTRUCTION GROWTH AND EMPLOYMENT BY REGION: 2023 (%) 26
CHART 15: CONSTRUCTION INDUSTRY: COMPANY INSOLVENCIES 2010 – 2019 27
TABLE 16: CONSTRUCTION SECTOR ADMINISTRATIONS ACTIVITY 2019 28
TABLE 17: TOP 20 GB CONTRACTORS BY REVENUE (£M) – CONTRACTS AWARDED AND SECTOR STRENGTHS 30
TABLE 18: TOP 20 GB CONTRACTORS: VALUE OF CONTRACTS WON BY REGION (YEAR TO NOVEMBER 2019) (£M) 32
TABLE 19: NACF CONSTRUCTION FRAMEWORKS – REGIONS, LEAD AUTHORITY, PROJECT DETAILS 35
CHART 20: CONSTRUCTION OUTPUT IN THE INFRASTRUCTURE (TRANSPORT & UTILITIES) SECTOR: 2015 TO 2024 – BY VALUE (£BN) AT CURRENT PRICES 37
CHART 21: TRANSPORT CONTRACTS DUE TO COMPLETE 2020-2025 BY VALUE (£M) AND NUMBER OF CONTRACTS (AS AT NOVEMBER 2019) 39
CHART 22: GB TRANSPORT CONSTRUCTION CONTRACTS IN THE PIPELINE (AS AT NOVEMBER 2019) (%) BY SUBSECTOR 39
CHART 23: UTILITIES CONTRACTS DUE TO COMPLETE 2020-2024 BY VALUE (£M) AND NUMBER OF CONTRACTS (AS AT NOVEMBER 2019) 40
CHART 24: GB UTILITIES CONSTRUCTION CONTRACTS IN THE PIPELINE (AS AT NOVEMBER 2019) (%) BY SUBSECTOR 40
TABLE 25: AMP6 WATER FRAMEWORKS 2015-2020: BY UTILITY COMPANY AND FRAMEWORK CONTRACTORS 42
TABLE 26: AMP7 WATER FRAMEWORKS 2020-2025: CONTRACTORS APPOINTED SO FAR 43
TABLE 27: TOP 10 CONTRACTORS IN THE TRANSPORT INFRASTRUCTURE SECTOR (BY NUMBER & VALUE OF CONTRACTS AWARDED) – YEAR TO NOVEMBER 2019 44
CHART 28: GB UTILITIES CONSTRUCTION: CONTRACT AWARDS BY SUBSECTOR (YEAR TO NOVEMBER 2019) (%) 45
TABLE 29: TOP 10 CONTRACTORS IN THE UTILITIES INFRASTRUCTURE SECTOR (BY NUMBER & VALUE OF CONTRACTS AWARDED) YEAR TO NOVEMBER 2019 46
CHART 30: CONTRACTORS OUTPUT FOR EDUCATION NEW WORK 2015 TO 2024– BY VALUE (£BN) AT CURRENT PRICES 47
CHART 31: SCHOOLS CONTRACTS DUE TO COMPLETE 2020-2024 (AS AT NOVEMBER 2019) BY VALUE (£M) AND NUMBER OF CONTRACTS 48
CHART 32: GB SCHOOLS’ CONSTRUCTION CONTRACTS IN THE PIPELINE (AS AT NOVEMBER 2019) (%) BY SUBSECTOR 49
TABLE 33: CONTRACT AWARDS IN THE SCHOOLS SECTOR – APPROXIMATE SHARE BY CONTRACTOR (YEAR TO NOVEMBER 2019) 51
CHART 34: CONSTRUCTION OUTPUT IN THE UNIVERSITIES/HIGHER EDUCATION SECTOR: 2015 TO 2024 – BY VALUE (£BN) AT CURRENT PRICES 52
CHART 35: HIGHER EDUCATION CONTRACTS (RESIDENTIAL/NON-RESIDENTIAL) DUE TO COMPLETE 2020-2024 (AS AT NOVEMBER 2019) BY VALUE (£M) AND NUMBER OF CONTRACTS 53
CHART 36: GB HIGHER EDUCATION CONSTRUCTION CONTRACTS IN THE PIPELINE (AS AT NOVEMBER 2019) (%) BY SUBSECTOR 53
TABLE 37: CONTRACT AWARDS IN THE HIGHER EDUCATION (NON-RESIDENTIAL) SECTOR – APPROXIMATE SHARE BY CONTRACTOR (YEAR TO NOVEMBER 2019) 55
TABLE 38: TOP 15 CONTRACTORS IN THE STUDENT ACCOMMODATION SECTOR (BY NUMBER OF CONTRACTS AWARDED) YEAR TO NOVEMBER 2019 56
CHART 39: CONSTRUCTION OUTPUT IN THE COMMERCIAL OFFICE SECTOR: 2015 TO 2024 – BY VALUE (£BN) AT CURRENT PRICES 57
CHART 40: COMMERCIAL OFFICE CONTRACTS DUE TO COMPLETE 2020-2024 BY VALUE (£M) AND NUMBER OF CONTRACTS (AS AT NOVEMBER 2019) 58
TABLE 41: GB COMMERCIAL OFFICE CONSTRUCTION CONTRACTS IN THE PIPELINE BY REGION (AS AT NOVEMBER 2019) (%) BY SUBSECTOR 59
TABLE 42: CONTRACT AWARDS IN THE COMMERCIAL OFFICE SECTOR – APPROXIMATE SHARE (%) BY CONTRACTOR (YEAR TO NOVEMBER 2019) 61
CHART 43: CONSTRUCTION OUTPUT IN THE ENTERTAINMENT & LEISURE SECTOR: 2015 TO 2024 – BY VALUE (£BN) AT CURRENT PRICES 62
CHART 44: ENTERTAINMENT & LEISURE CONTRACTS DUE TO COMPLETE 2020-2029 BY VALUE (£M) AND NUMBER OF CONTRACTS (AS AT NOVEMBER 2019) 63
CHART 45: GB ENTERTAINMENT/LEISURE CONSTRUCTION CONTRACTS IN THE PIPELINE BY SUBSECTOR (AS AT NOVEMBER 2019) (%) BY SUBSECTOR 64
CHART 46: GB HOTEL DEVELOPMENT PIPELINE 2020-2024: (NO. BED-SPACES) 64
TABLE 47: CONTRACT AWARDS IN THE ENTERTAINMENT/LEISURE & SPORT SECTOR – APPROXIMATE SHARE (%) BY CONTRACTOR (YEAR TO NOVEMBER 2019) 66
CHART 48: CONSTRUCTION OUTPUT IN THE INDUSTRIAL SECTOR: 2015 TO 2024 – BY VALUE (£BN) AT CURRENT PRICES 68
CHART 49: INDUSTRIAL & WAREHOUSING CONTRACTS DUE TO COMPLETE 2020-2024 BY VALUE (£M) AND NUMBER OF CONTRACTS (AS AT NOVEMBER 2019) 69
CHART 50: GB INDUSTRIAL CONSTRUCTION CONTRACTS IN THE PIPELINE (AS AT NOVEMBER 2019) (%) BY SUBSECTOR 70
TABLE 51: CONTRACT AWARDS IN THE INDUSTRIAL SECTOR – APPROXIMATE SHARE (%) BY CONTRACTOR (YEAR TO NOVEMBER 2019) 71
CHART 52: CONSTRUCTION OUTPUT IN THE RETAIL SECTOR: 2015 TO 2024 – BY VALUE (£BN) AT CURRENT PRICES 72
CHART 53: RETAIL CONTRACTS DUE TO COMPLETE 2020-2027 BY VALUE (£M) AND NUMBER OF CONTRACTS (AS AT NOVEMBER 2019) 76
CHART 54: GB RETAIL CONSTRUCTION CONTRACTS IN THE PIPELINE BY SUBSECTOR (AS AT NOVEMBER 2019) (%) 76
TABLE 55: CONTRACT AWARDS IN THE RETAIL SECTOR – APPROXIMATE SHARE (%) BY CONTRACTOR (YEAR TO NOVEMBER 2019) 78
CHART 56: CONTRACTORS OUTPUT FOR HEALTH NEW WORK 2015 TO 2024– BY VALUE (£BN) AT CURRENT PRICES 79
TABLE 57: SUMMARY OF MAJOR HEALTHCARE CAPITAL SPENDING PROGRAMMES 2018-2024 BY PROGRAMME VALUE (£BN) 80
CHART 58: HEALTHCARE CONTRACTS DUE TO COMPLETE 2020-2024 (AS AT NOVEMBER 2019) BY VALUE (£M) AND NUMBER OF CONTRACTS 81
CHART 59: GB HEALTHCARE CONSTRUCTION CONTRACTS IN THE PIPELINE (AS AT NOVEMBER 2019) (%) BY SUBSECTOR 81
CHART 60: CONTRACT AWARDS IN THE HEALTHCARE SECTOR – APPROXIMATE SHARE BY CONTRACTOR (YEAR TO NOVEMBER 2019) 82
CHART 61: GVA CHAINED VOLUME MEASURES, 2015-2019, KEY CONSTITUENT ELEMENTS 84
CHART 62: CPI INFLATION AND BANK OF ENGLAND BASE RATE, 2008-2023 84
CHART 63: AVERAGE WEEKLY EARNINGS DATA – GB – TOTAL PAY – 2014-2019 (SEASONALLY ADJUSTED) 85
CHART 64: PDI & SAVINGS RATIO AT CURRENT PRICES 2008-2023 86
CHART 65: EXCHANGE RATE FLUCTUATIONS 2015-2019, STERLING TO THE DOLLAR AND THE EURO, SPOT RATES 87


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