Glenigan sees major rebound in educational sector

The education sector is likely to lead the construction industry out of recession, with underlying construction starts forecast to rebound by over 12% in 2010, according to research by Glenigan for the Interbuild exhibition.

This predicted spike in activity, boosted by the £45 billion Building Schools for the Future programme, is seen as demonstrating that public-sector investment will continue to be a prime focus for the industry over the next two years.

For the present, however, the Glenigan Index for April recorded a 30% fall in new construction project starts compared with a year ago. There was a halving in housing schemes and a sharp fall in non-residential projects. In contrast, civil-engineering project starts have picked up sharply since the start of the year.

While detailed planning approvals for public-sector projects have been weak, Glenigan has identified a number of projects at the tender stage which indicate that the second half of 2009 will be more positive. However, the boost is likely to be short lived, with gross Government investment set to fall 27% over the next five years. The construction industry will need to look elsewhere for growth as the UK emerges from recession over the next couple of years.

Near term, the flow of project starts is predicted remain extremely weak. Based on projects currently being tracked, Glenigan forecasts that the index will be 18% down during the second quarter of 2009 on a year ago. The index is expected to improve during the second half of the year, but construction activity is expected to remain subdued until 2011.

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