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Project starts fall 4% year on year in November

Construction activity contracted in the three months to the end of November, with project starts falling by 4 per cent.

Housing, non-residential and civil engineering starts all fell back in the quarter compared with the same period a year earlier, according to data from intelligence provider Glenigan.

Commercial and industrial work was flat year on year, while falling starts in the office and retail sectors were offset by growth in industrial and hotel starts.

Private housing starts grew by 2 per cent in the three months to the end of November year on year, but public housing starts dipped by 9 per cent over the same period.

Meanwhile, civil engineering starts dropped by 8 per cent, despite a year-on-year increase in utilities activity.

Regionally, Scotland, Wales and Northern Ireland continued to struggle; all three regions have failed to record growth in project starts since March 2015.

London and the South-east both bounced back after seeing starts decline in the three months to October.

Outside of London and the South-east, only the West Midlands and the North-east posted an increase in starts in the three months to November compared with a year earlier; all other English regions posted a decline.

The Glenigan Index now stands at 104.4 – its fifth lowest reading in the last 12 months and significantly below the high of 123.9 recorded in March 2015.

Commenting on the data, Glenigan economics director Allan Wilén said: “The latest evidence on commercial construction starts is disappointing given the continued strength of the economic backdrop.

“However, the forward pipeline is much more positive. In the offices sector, for example, the value of work achieving planning approval has risen by more than 50 per cent during the last three months.

“The chancellor’s Autumn Statement pledges on housing appear to be a further boon to the private housing sector. In the short term, activity may undergo a pause as developers assess how best to reap the potential rewards.”

 

 

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