Glenigan foresees rise in pipeline of public work
There are growing expectations that this year’s Autumn Statement by the Chancellor of the Exchequer will see the Government release additional funds for capital projects as it seeks to counter post-Brexit turbulence and shape its longer-term strategy for the UK economy, according to Glenigan. Glenigan’s project data reveals a growing pipeline of public-sector projects that could be early beneficiaries of additional Government funds.
Glenigan has tracked a strengthening in the value of underlying projects gaining planning consent over the last 18 months in key public-funded areas such as infrastructure, social housing and education. Many of these projects will be close to ‘shovel ready’, and Glenigan believes a more relaxed funding regime could accelerate their transition to work on site.
In the education sector, the value of underlying projects clearing planning during the period January to July was 24% up on a year earlier. For social housing, the growth was 31%. A more modest growth in planning approvals for health and community and amenity is building on earlier growth during 2015.
Another survey by the company, its Glenigan Index, indicates uncertainty following the Brexit referendum. The value of starts on site in the three months to July was 12% down on the same period a year ago and 32% down on the previous three months.
Allan Wilén, the company’s economics director, said, ‘The 12% decline in the Glenigan Index covers project starts in the run-up to the EU referendum and its immediate aftermath. High levels of political and economic uncertainty during the period prompted many private-sector investors to defer investment decisions, contributing to the recorded drop in project starts.
‘The potential development pipeline remains firm, with the value of projects securing detailed planning approval during the first half of 2016 being 5% up on a year ago. However, the strongest growth in approvals has been in those sectors where project starts have been most affected by referendum uncertainty — private housing, industrial and office developments.’