Commercial sector dominates project starts in construction
The pace of construction starts year on year has accelerated, according to the Glenigan Index for November. Projects starting on site during the three months to October were up by 4% compared to a year earlier. This figure is slightly up from 3% in September and marks the 17th consecutive monthly rise in the Glenigan Index.
The growth was dominated by office and retail starts, which both saw a 25% year-on-year increase. The commercial sector was boosted by a number of major schemes in London — including the £95 million One Mitre Square development, which broke ground in August.
Allan Wilén, economics director at Glenigan, said, ‘Commercial and civil-engineering work are taking over from housing as the lead drivers of new construction starts.
‘This broad footing of construction growth bodes well for the upcoming period of political uncertainty ahead of the general election and as expectations of an interest-rate rise appear to be dampening confidence among UK homeowners.’
Private house building continues to grow, with starts rising by 15% so far in 2014. Social-housing starts were flat for the year so far.
Industrial starts fell for the first time since July 2013. However, Glenigan expects the slowdown to be short-lived, with industrial remaining on course to be the fastest-expanding sector during 2014. However, Glenigan expects this slowdown to be short-lived, with industrial remaining on course to be the fastest-expanding sector during 2014.
A substantial flow of prospective industrial projects continues to make its way through the planning pipeline, with the underlying value of projects receiving approval up 43% in the three months to December.
The monthly Glenigan Index is based on extensive research of every construction project starting in the UK over the previous three months.