Business barometer: Value of work tumbles but housing repairs put Apollo and Mulalley on top
The value of work won by contractors plummeted by more than a third in June, but social housing specialists shot up the table as councils rushed to get work signed off.
The total value of contracts won during June was £1.4bn, down from £2.2bn in May. Contributing factors included the government shutting up shop for the general election. This prompted a drop in public and commercial work - from £572m last month to £381m in this month’s tables - as clients waited to see what the new government would do.
Some comfort may be found in social housing maintenance work, which catapulted Apollo and Mulalley into the top three places in the contractors table. Apollo won more than £165m of social housing work, including an £87.5m contract for the London borough of Southwark, while Mulalley picked up a £120m maintenance job for Hackney Homes.
But recent cuts to the budget of the Homes and Communities Agency suggest work in that sector will fall in July, giving contractors little chance to create healthy order books.
Kevin Cammack, an analyst at Cenkos, said: “In the medium term the number and value of contract wins in the social housing sector will probably reduce. With these results, you may find there’s a clutch of contracts where local authorities may have wanted to get the work in before the cuts.”
He also cautioned against reading too much into the sharp drop in commercial work. “It’s one of the least predictable and most volatile sectors,” he said.
Sisk managed to buck the trend of falling private sector work, scooping £135m of commercial work, including an £84.4m job on Grosvenor House Apartments in London.
Another reason for the sharp difference between May and June was that May was an unusually busy month, as clients rushed through publicly funded schemes in advance of anticipated cuts. The results are also better than those for June 2009, when contractors won just £1.3bn of work.