The construction industry performance has returned to a state of stagnation, with declines in residential and non-residential sectors resulting in an overall drop in project starts, the latest Glenigan data reveals.
The data shows that the value of underlying work starting on-site fell 3% against the preceding three months to stand 7% lower than a year ago.
Looking at each sector, residential project-starts weakened during the three months to September. The value fell by 2% against the preceding three months to stand 9% lower than 2023 levels.
Private housing construction-starts rose by 2% against the preceding three months, experiencing a 3% decline on the year before, dropping 3%.
Social housing project-starts went down by 12% against the preceding quarter and 24% compared to last year.
Elsewhere, the non-residential sector posted sharp project-start declines during Q3.
Hotel and leisure increased by 29% against the preceding three months and 83% against the previous year.
Civil engineering project-starts achieved minor success, performing well against the preceding quarter, increasing 8%.
This growth can be largely attributed to the value of infrastructure work starting on-site, which increased 5% against the preceding quarter and by 20% on the previous year.
Utilities starts also performed well, increasing 12% against the preceding three months to stand 5% up on last year.
Office project-starts went down by 33% against the preceding three months as well as 37% compared with the year before.
The industrial sector weakened by 21% against the preceding quarter, declining 17% on the previous year.
Community and amenity (-12%) and education (0%) performance failed to grow against the preceding quarter, both experiencing falls of 6% and 9% respectively against the previous year.
On a regional basis the North East and Wales experienced the greatest falls in project-starts against the preceding quarter, declining 44% and 36%, respectively. Both regions also experienced falls on the previous year, declining 39% and 47%.
Yorkshire project-starts fell 28% against the preceding quarter to stand 16% lower than a year ago.
The value of starts in London declined 9% against the preceding three months and remained 26% down on the previous year.
However, project-starts in both the South West (+14%) and Northern Ireland (+7%) grew against the preceding three-month period, increasing 13% and 42% against a year ago, respectively.
This was also the case in the East of England, which experienced an increase against both the preceding three months (+8%) and the previous year (+14%).
Glenigan economic director Allan Wilen says: “Many will be disappointed that the hopes of revival, often heralded by the election of a new Government, have not yet come to fruition. Confidence remains low in the private sector, not helped by the prospect of the upcoming Autumn Budget Statement, which many see sweeping changes to tax and planning policy. Investors are, understandably, cautious. Likewise, a lack of clarity on public sector spending has also pushed back project start dates and left some up in the air altogether.”
“Everyone will be on tenterhooks to see what will come out of the Spending Review, but this is still months away and leaving many high and dry. It makes an uncertain situation even more precarious, and the sector is in a delicate position, highlighted by the collapse of ISG and its subsidiaries last month.”
“However, the sector has weathered far worse storms than this, and it was encouraging to see Hotel and Leisure starts way up on previous figures, hinting at a much-needed revival in one of the UK’s hardest-hit verticals. Hopefully, clarity on the announcements will help to assuage the unease, which is having a significant knock-on effect on almost every other vertical, dampening overall construction-starts.”
