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Construction starts take a brief holiday in August, says report

The value of construction projects started suffered a summer lull but is expected to bounce back, according to research by data service Glenigan.

Glenigan said the value of starts in the three months to August rose just 2 per cent compared with the previous year and fell 5.5 per cent between July and August because of falls in public sector and commercial office work.

Growth in non-residential work fell to 2 per cent in the year to August because of declines in education and office schemes but office projects are expected to grow later this year and in 2015.

The value of private housing starts rose 11 per cent against the same period in 2013 taking the sector to 17 months of consecutive growth. The value of industrial projects also grew.

But social housing saw a considerable slow down with the value of starts falling 13 per cent in a year. The report said there had been insufficient bids by housing associations for the latest government funding round.

There was little change in the value of civil engineering starts between August 2013 and 2014, but this should improve as the value of projects awarded in the first eight months of the year was up 28 per cent on a year earlier.

Some regions defied the summer slowdown with starts up 80 per cent in Yorkshire and the Humber compared to a year ago and double digit growth in the North-east, Northern Ireland and Wales. But starts fell in the East of England, Scotland and London. The London fall reflects the drop in office work while Glenigan’s report said the decline in Scottish starts may reflect developers waiting for the outcome of the referendum on independence later this month.

Allan Wilén, economics director at Glenigan, said: “The current slowdown in project starts over the summer is expected to prove short lived, with increased private sector work expected to lift starts after the summer lull.

“The private housing sector is expected to remain strong. Media attention has focused on a potential cooling in the London property market after the sharp price rises seen over the last year; however demand for homes is strengthening elsewhere.

Glenigan

Construction data service Glenigan has won a contract to supply planning application and development pipeline data to the department for communities and local government.

Glenigan will collate and analyse private, domestic and commercial planning applications data across England under the contract which began on 1 August 2014.

DCLG will use the data to understand the range of applications and the timing of development stages to assess the impact of its planning reforms. The Cabinet Office and Homs and Communities Agencies will also use the data.


“Help to Buy has improved the demand for new homes, with 82 per cent of supported loans going to first time buyers and 94 per cent of sales being of properties outside the capital.

“Non-residential building activity is also set to strengthen during the remainder of this year and into 2015, driven by a marked pick-up in commercial and industrial contract awards.”

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