Construction projects put on hold increased by almost 30 per cent in 12 months
The value of projects being put on hold has increased by almost 30 per cent in the past 12 months, despite a resurgent construction industry.
The recent data, compiled by construction data experts Barbour ABI for Building magazine, illustrates 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 per cent 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 is a reaction by clients to increased tender prices by contractors and specialists, which are thought to have risen by 15-20% 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, jumping by a significant 49 per cent, followed by North England with an increase of 37 per cent.
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.”
