Glenigan survey forecasts a gradual recovery
Despite a poor December, caused by bad weather, Glenigan forecasts that the construction industry will improve in 2010. Economics director Allan Wilen says, ‘Construction-industry prospects are expected to gradually brighten over the course of 2010 as private-sector confidence starts to recover, although Government-funded projects will be increasingly constrained by budgetary restrictions.
The weather in December forced construction-project starts to be postponed, and the Glenigan index recorded a 9% year-on-year decline in December — making it the poorest month for construction-projects starts in recent years.
The housing market has stabilised progressively over the last six months, with an increased flow of new private-housing starts since the Autumn. Despite a temporary easing in projects starts in November and December, the Glenigan residential index for December was still 6% higher than a year ago.
The non-residential index for December fell back sharply to 24% lower than a year earlier. The fall was due to the continued weakness of the private industrial and commercial sectors, combined with a slowing in Government-funded projects.
The civil-engineering index for December was 16% higher than a year earlier.
Looking ahead, Allen Wilen says, ‘The flow of private-sector work is forecast to improve during 2010. In contrast, the pick-up in public-sector starts since April 2009 has begun to lose momentum, and Government funding cuts will further restrict the flow of public-sector schemes over the medium term. Accordingly, whilst underlying construction project starts are off recent lows, the anticipated recovery over the next two years will be slow and fragile.
