Construction starts fall, but outlook is promising


The value of new projects starting on site (excluding projects valued at over £100 million) was 4% lower during the three months to November than a year earlier, according to figures from Glenigan. There were declines in both residential (-2%) and non-residential (-4%), but the overall figures were made worse by an 8% decline in civil engineering.

The amount of new commercial and industrial work was flat on a year earlier, with growth in the industrial and hotel and leisure sectors offsetting falling starts for office and retail schemes.

Allan Wilén, Glenigan’s economics director, said, ‘The latest evidence on commercial construction starts is disappointing given the continued strength of the economic backdrop.

‘However, the forward pipeline is much more positive. In the office sector, for example, the value of work achieving planning approval has risen by more than 50% during the last three months.’

The public sector is continuing to decline. The value of the health sector is forecast to fall by 25% during the course of 2015 alone; during the latest three months, starts were almost 50% down on a year earlier.

The education sector is also in decline. Despite schools funding being ring-fenced, Government capital programmes do not seem to be making a huge impact on the ground.

Private-housing activity was up by 2% on a year ago, but this rise was more than offset by the 9% fall in starts for social housing. Plans for increased support for housebuilding have been aimed at increasing home ownership, bringing little relief for the rented-accommodation model championed by housing associations.

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