Glenigan reports continued growth in construction starts
The February Glenigan Index for construction activity was 10% up year-on-year, driven by continued rises in private non-residential starts and new infra-structure. The office sector, in particular, continues a rapid rate of expansion, with project starts up by 52% compared to a year ago. Industrial project starts were up by 16%, as manufacturing output and investment into new capacity increases.
There was an overall 2% decline in the residential index, with private-housing growth slowing to 5% and social-housing starts dropping 15% as recent flooding delayed project starts.
The recent flooding is likely to have a negative impact on the UK economy, especially due to disruptions across transport networks and some business closures in affected areas. New housing appears to be among the affected sectors, with conditions appearing to delay new site openings.
However, later in 2014, it will cause a small rise in repair and maintenance work.
Allan Wilén, economics director at Genigan, said, ‘Private-sector investment is the main driver behind the latest 10% rise in construction project starts. Glenigan has recorded growth in the commercial and industrial property sectors that will feed through as higher industry workload during 2014 and 2015.’
Activity in the office sector continues to see rapid rates of expansion, and investment into new capacity increases. Retail starts were just below levels seen a year ago.
The hotel and leisure sector has recently lagged growth in other sectors, as doubts remain about when improving economic sentiment will translate into higher discretionary spend on travel and leisure. However, the three months to February saw a return to growth in the sector, with starts up by 21%.
The education sector saw strong growth of project starts during 2013, rising by 17% over the year as a whole. However, new activity slowed over the latest 3-month period, with starts flat on a year ago.