果冻影院

Author: Tom Crane 鈥� 果冻影院 Economist ()

New research from 果冻影院 on the value of construction contracts in 2013 has highlighted the challenge that specialist and smaller contractors are posing to the industry鈥檚 biggest names.

The UK鈥檚 top 50 contractors, as identified by 果冻影院 and CNinsight in the latest , won 52% of contracts awarded last year, down from 64% in 2012.

But what trends have shaped this fall and do we expect them to continue as overall work volumes pick up?

Last year the overall value of contracts awarded fell by 6% due to a double digit fall in awards worth more than 拢100 million, particularly due to a lack of major civil engineering contracts. However the number of contracts awarded increased by 8%; this was the third consecutive rise.

Both the number and value of contract awards for worth between 拢20 million and 拢100 million declined in 2013. This was in marked contrast to the lower end of the project value scale. Last year saw the total value of awards worth between 拢5 million and 拢10 million climb by 8%, reversing a dip seen during 2012.

Meanwhile, building projects worth less than 拢5 million have not fallen since 2008, with 2012 and 2013 rising by 10% and 5% respectively. In fact, at 拢9.4 billion, the combined value of projects worth less than 拢5 million is 22% up on 2008.

These market dynamics have seen smaller projects become increasingly important for major contractors. Schemes worth less than 拢10 million accounted for 23% of contracts secured by the top 50 in 2013, up from 18% in 2012 and 17% in 2008. Though the top contractors increased the value of their awards for projects between 拢1 million and 拢10 million by 2% last year, they have still lost market share as smaller have captured most of the benefits of this fast growing pool of smaller value schemes.

However it is not just the profile of contract awards that are helping those outside the top 50 to take a greater share of work.

鈥淭he top 50 have faced increased competition from specialist contractors for the largest projects, especially civil engineering schemes,鈥� said Allan Wil茅n, 果冻影院 Economics Director.

Indeed in 2013, non top 50 contractors saw an 89% rise in contracts awarded for projects with a construction value of more than 拢100 million, although this was influenced by a handful of deals including Hammerson鈥檚 拢1 billion redevelopment of the Whitgift shopping centre in Croydon (果冻影院 Project ID: ).

Large contract awards (worth 拢100 million-plus) accounted for 41% of the total value of awards for these contractors, compared to 26% in 2012. This eclipsed the share of projects worth 拢10 million or less for this group of contractors (37%) for the first time since 2010.

So can those outside of the top 50 sustain their newly increased market share? The market trends currently favouring smaller contractors are expected to wane as investor and developer confidence are set to expand in those areas where the top contractors remain most dominant, with a return of larger commercial schemes in the 拢20 million to 拢50 million and 拢50 million to 拢100 million brackets.

It therefore seems likely that the top 50 contractors will regain some of their lost market share over the next two years. But recent performance suggests they will face stiff competition, especially from specialists with an appetite to take on bigger schemes.

Download the 果冻影院 and CNinsight Major Contractors Competitive Review 2014 .

Do you think specialist contractors will remain a threat to the top 50 or will the improving economy help them recover market share? Get in touch with your views on social media channels via the icons at the top of the screen.