Project starts will remain weak for the rest of the year with a weak private sector creating a drag until the New Year, according to business intelligence service Glenigan.
But in its monthly analysis of project starts for September, the construction intelligence firm, which shares a parent with Construction News, said the rate of decline had slowed.
September’s index revealed the value of projects starts had fallen 4 per cent year on year.
Th report said: “This is in marked contrast to the sharp falls in project starts seen during the first half of the year.
“The stabilisation in project starts has been led by increases in public sector and civil engineering work. Whilst, poor private sector activity, including a renewed weakening in private housing projects, is forecast to remain a drag on project starts during the final quarter of this year, the flow of new work is forecast to improve during 2010.”
The recent pick-up in public sector starts appears set to lose momentum during the closing months of 2009, however, while Government funding cuts will restrict the flow of public sector schemes over the medium term.
So while the Index is off recent lows, the value of underlying project starts is forecast to be weak for some time, said the report.
UK recession, weak household earnings and limited mortgage availability are expected to restrict any recovery in new house sales or project starts near term but a gradual recovery in new residential projects is forecast over the course of 2010 as market conditions further improve.