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Private housing provides boost as 2014 project starts grow by 10%

Project starts across the construction sector were up 10 per cent in 2014 compared to a year earlier, with growth reaching its fastest rate since 2007.

Private housing starts were up by 15 per cent in 2014 and 7 per cent up in Q4 compared to the previous year, according to data from Glenigan, while social housing starts were up 8 per cent for the year.

However, the final quarter of the year saw a dip in activity in several sectors. In December alone growth in starts remained flat, with a 14 per cent drop in civil engineering activity cancelling out a 4 per cent rise in non-residential starts.

The non-residential sector was the only area to see growth in the final quarter of 2014, driven by double-digit surge in the office and commercial sectors. By contrast, retail starts dropped further in Q4 and are down overall in 2014 compared to a year earlier.

Project starts in the health sector have bounced back following a slow start to 2014 with growth of 18 per cent in Q4.

Commenting on the data, Allan Wilén, Economics Director at Glenigan, said: “While the industry appears to have been catching its breath during the final quarter, this should be no cause for alarm.

“The forward pipeline is also encouraging. In contrast to the pause in starts over the last three months, the flow of projects achieving planning approval has accelerated.

“Reforms to the stamp duty system announced in the Autumn Statement will give a mild boost to the housing market, which showed signs of cooling during the second half of 2014.

“The changes are also likely to push average house prices higher, as stamp duty savings improve affordability. Both of these factors would support further uplifts in the rate of private housing starts during 2015, though improved household finances and greater mortgage availability will be the more critical drivers.”

 

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