Rise of 30% in value of stalled construction projects last year, study suggests
Published: 15 September, 2015
The value of projects being put on hold has increased by almost 30% in the past 12 months, new data has revealed, despite a resurgent construction industry.
The data, compiled by construction industry data providers Barbour ABI for Building magazine, appears to show that in the 12 months from September 2014 to August 2015, £12 billion of construction projects were put on hold. This compares to £8.6 billion in the previous 12 months, resulting in an increase of 29% in just one year.
The sharp increase in the volume of work being put on hold comes despite the growth the construction industry has experienced over the last two years. One of the major reasons for this suggested by Barbour ABI is a reaction by clients to increased tender prices by contractors and specialists, which are thought to have risen by between 15 and 20% in the last year alone.
London and the South East experienced the biggest jump in projects being put on hold in the last 12 months, increasing by 49%, followed by North England, which saw an increase of 37%.
Joey Gardiner, deputy editor of Building, said: “Many construction clients, particularly those in the public sector, have been put in a huge dilemma with tender prices coming back from contractors that are far higher than they’ve budgeted for.
“The result is that many projects are going on hold or taking months and months to agree a price with what are suddenly risk-averse builders.
“Contractors and clients need to engage openly and honestly about these current market dynamics to avoid this becoming a major problem for the recovering construction economy,” Mr Gardiner added.