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Confidence gap widens for regional contractors


Regional differences between contractors’ confidence are becoming more pronounced, according to a Turner & Townsend report.

The UK Market Intelligence report shows contractors foresee an increased level of stability for the UK construction industry, with order books showing growth in the first quarter of this year.

However, growth is set to be down in 2017/18 and 2018/19 and estimates for tender price increases vary significantly across the regions.

Contractors in the booming London and North West markets foresee an increase of 4.1% while contractors in the North East, historically more dependent on EU funding for projects, anticipate a tender price rise of just 1.4%.

Turner & Townsend managing director for UK cost management Paul Connolly said devolution appeared to be acting as a catalyst for growth in some regions.

“Birmingham and Manchester in particular are emerging as attractive alternatives to the capital, reporting a stronger market outlook than city regions yet to agree a devolution deal with central Government,” said Connolly.

“With large volumes of work coming forward in these regions, tender conditions are strong, with contractors experiencing less competition and a general movement towards price growth.”

HS2 is said to be partly responsible for the strong performance in the West Midlands, which showed order book completion rates of 78% for 2017/18.

Concerns over skills shortages prevail, particularly in the North East and Northern Ireland where skilled candidates move elsewhere for work.

The report collated responses from tier one, two and three contractors from across the UK.

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