A “consistently weak” construction-start performance over the first two months of 2023 has led to project-starts dropping 55% over the last three months, averaging at £4,173m per month, the latest Glenigan construction review reveals.

Data shows that project-starts fell 46% on an annual basis.

Main contract awards also dipped 16% in the run-up to March and were down 15% on 2022 figures.

However, detailed planning approvals registered a 19% increase in the three months to the end of February, growing 21% against the previous year.

Residential starts-on-site fell during the three months to February, dropping 27% during the index period to stand 43% lower than a year ago.

Private housing was down 39% on the previous year while social housing plummeted by 57% against the previous year’s figures.

For non-residential sectors, industrial performance went down 41% during the three months to February to stand 57% lower than a year ago.

The value of retail project-starts declined 39% against the previous year’s figures while office project-starts slipped back 28%.

Health starts fell 34% against the preceding three months and declined 50% on the year before.

Despite a modest 1% decrease against the previous three-month period, education project-starts were also 24% lower than last year.

Hotel and leisure and community and amenity were two of only three verticals to experience growth against the preceding three months, rising 35% and 5%, respectively.

However, both failed to increase on the previous year.

Civils performance stood 17% down on a year ago while infrastructure starts dropped 43% on the previous year’s figures.

However, the decline in civils was partly offset by utilities activity, with starts increasing 6% against the preceding three months to stand an impressive 76% up on a year ago.

On a regional basis, data found that project-starts in the North East increased 19% during the three months to January but remained 20% down compared to a year ago.

In the South East, project-starts increased 5% against the preceding three months but was 27% behind the previous year.

Over the last three months, performance in London was down 18% and the South West fell by 15%.

Meanwhile, in Scotland, the value of project-starts fell 31% against the preceding three months to stand 35% down on a year ago.

Yorkshire and the Humber experienced the sharpest decrease against both the preceding three months where is suffered a 53% decline and the previous year where figures were down by 61%.

Wales, Northern Ireland, the East Midlands, West Midlands, and the North West all suffered falls in project-starts against both the preceding three months and the previous year.

Glenigan economic director Allan Wilen says: “This underwhelming performance can be largely attributed to ongoing external constraints on the UK construction industry, including soaring energy and materials price inflation, driven by international conflict and demand-led shortages.”

“Coupled with high-interest rates and a raft of incoming business-led taxes and you have a perfect set of conditions to dent consumer and investor confidence, resulting in depressed activity across most of the UK Construction sector.”

“However, the current situation may ease in the coming months, political stability has improved over the last few weeks and the expectation that interest rates will not increase as much as initially feared will hopefully provide a degree of certainty.”

“The Chancellor’s Spring Budget announcement yesterday has offered a future glimmer of hope, particularly a significant pipeline of upcoming work through an ambitious, nationwide programme of Investment Zones and urban regeneration projects coupled with a promised upgrade of transport infrastructure. This will no doubt provide plenty of opportunities for hungry and agile contractors over the coming years.”

“Also welcome is confirmation in the Spring Statement that the Government intends to ease the restrictions on the recruitment of overseas labour for five construction trades. This should help ease the staff recruitment and retention problems experienced by many firms in the industry.”