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Construction continues in Birmingham but at reduced level

Six new construction starts in Birmingham over the past 12 months signal development is still happening in the city, albeit at a reduced level.

The annual Drivers Jonas Birmingham Crane Survey shows activity is more diversified this year with developments with a high residential content accounting for only six of the 12 projects under construction, compared with 14 of the 21 projects in 2008.

Highlighting the difficulties experienced in the residential sector, three key Birmingham schemes have been put on hold since 2008’s survey.

The second phase of Masshouse stalled when David McLean went into administration last October.

Work has not commenced on the second phase of Newhall Square after completion of the first phase (a Travelodge and 10,900 sq ft of offices) and the planned residential development is expected to be switched to an office scheme, dependent on a pre-let.

Work on the residential and hotel elements of Snowhill has also been on hold.

On a more positive note for the development sector, there are a number of large public sector development projects in the pipeline that are currently being worked up, with construction starts expected over the next 12 to 24 months.

Major projects including the £193 million Library of Birmingham, £600 million redevelopment of New Street Station and the £1.5 million Jewellery Quarter public square, could all contribute to a rise in future crane activity.

Drivers Jonas development partner Jill Astley said: “This year’s survey is encouraging, showing that development activity is still happening in Birmingham, but at the same time providing a strong signal that the 2010 Crane Survey results could for the first time include solely public sector led projects.

“With £6 billion already committed by the public sector, it is realistic to expect development in this area to continue despite tougher market conditions; this will be vital to maintain construction momentum in the city.

“If present conditions prevail, we believe it very unlikely that any new mainstream commercial or residential projects will emerge in the next 12 months, as both developer and financier confidence needs to return before the market will be able to sustain new private sector schemes.”