While it’s not a surprise to hear more public sector projects are being shelved, the news that Glenigan figures reveal such a rising number of private sector projects being put on hold sends a warning sign for an anaemic industry recovery.
It comes against a backdrop of weak confidence in economic recovery, borne out by the modest GDP growth of just 0.2 per cent this quarter.
It is not just the number of projects being placed on hold that gives rise to caution. The number of projects coming off the shelf and back into this quarter is half that of a year ago. Conversely, we’ve seen a 47 per cent drop in cancelled schemes, indicating that while developers are not necessarily ready to get back into the saddle, they have not abandoned all hope of a restart in the industry.
As well as increases in the stalling of private housing, retail and hotels and leisure schemes, the industrial sector has seen 43 per cent more projects put on hold in the first six months of 2011 than in 2010. Manufacturing production fell by 0.3 per cent this quarter, having previously been a strong contributor to GDP growth, and there has been little appetite for speculative development in a sector dogged by oversupply when the recession took hold.
What the figures suggest, amid the sobering economic news this week, is that we’re bracing ourselves for a stalled recovery. Despite faltering momentum in some sectors that we hoped would turn things around, such as private housing, opportunities are presenting themselves in various parts of infrastructure, which saw a 46 per cent drop in the number of projects placed on hold this quarter, with large projects in rail and energy or renewables on the horizon.