Construction start performance during the second quarter of this year increased 13% compared to 2023, boosted by a substantial uptick in major projects, Glenigan’s latest report reveals.
Averaging £9,247m per month, work starting on site in the three months to the end of June decreased 13% against the preceding three months, but grew by the same amount compared with last year.
Glenigan said the boost was attributed to a 91% rise in major project starts compared to 2023.
However, underlying project-starts dipped 2% during the three months to June and 19% compared to the previous year.
Despite this, Glenigan’s economic director Allan Wilen says the latest results are “a sign that the industry is starting to move in the right direction”.
Further data showed that main contracts awards fell 34% against the previous three-month period and 32% against 2023 levels.
Major contract awards were down 55% on Q1’s figure and 38% lower than the same time last year.
Underlying contract awards also fell, declining 16% against the preceding period and 30% compared to 2023 levels.
Planning approval figures also declined, down 19% against Q1 figures and 21% on a year ago.
Major planning approvals fell 43% against the preceding period, with the value decreasing by 40% on last year.
Underlying planning approvals increased a modest 1% in the preceding three months, but finished 7% lower than the same period in 2023.
The sector-specific and regional index saw starts softening across the board.
The North East was the strongest-performing region in the UK, with project-starts increasing 56% against the preceding quarter, to stand 8% up on this time last year.
The South West also saw an increase, with starts up 20% in the preceding three months. However, it declined 10% compared to the year prior.
Glenigan’s Allan states: “The downward trend in approvals could signal a potential stalling in construction activity, to be expected due to the impact of the recent General Election and the usual summer slowdown.”
“However, I’d expect a gradual easing in interest rates over H2 2024 and greater stability as the new Government settles in, to create renewed industry confidence and an upturn in demand; good news for the industry.”
“Furthermore, the Chancellor’s commitment to reform the NPPF should create opportunities for housebuilders over the rest of the year and into H1 2025.”
