Private-sector project starts spring back

Private-sector construction starts have returned to growth, according to the latest figures from Glenigan. Although the underlying value of construction was 8% lower than during the three months to August than a year earlier, this rate improved from a 20% decline in July. The month of August alone saw starts up strongly from a year ago.

The office, hotel and leisure, and industrial sectors have all returned to growth in the last three months. The value of underlying office starts, excluding those on schemes valued at over £100 million, was 18% higher than a year earlier.

The hotel and leisure sector saw a rise of 8%.

Retail starts remained 8% down on a year ago. However, this was an improvement on a 21% fall in the three months to July, with August alone seeing strong levels of new activity.

Industrial starts were also a up on a year earlier, rising by 19%.

However, stasis across the public sector is still weighing on construction starts. Non-residential starts as a whole were 9% down on a year earlier. The value of new education, health and other community and amenity schemes starting was well down on year earlier during the three months to August.

Commenting on this month's figures, Allan Wilén, Glenigan's economics director, said, ‘The uncertain and hard-to-call election continued to cast a shadow over the construction industry for much of the summer. Indeed a scarcity of public-sector projects is continuing to weigh on new activity, leaving non-residential starts 9% down on a year earlier during the three months to August.’

He added, ‘However, the latest Glenigan starts data shows the commercial and private housing sectors coming back to life, and we expect a similarly strong September to drag starts overall back into growth for the third quarter.

‘Private-residential project starts also grew at a healthy pace, up 11% on a year earlier. Although this growth was also offset by public-sector weakness as the downward trend in social housing starts has continued pulling Glenigan's residential growth index down to -2%.’

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