Election disrupts non-residential starts but private housing activity improving
- Starts in the three months to June were 4% lower than a year ago.
- Non-residential project starts were 14% down on the same period in 2016, due to falls in retail, health, education and community & amenity projects.
- Residential starts were 14% up on a year ago, due to a strengthening in private housing starts.
- Civil engineering starts were 28% down on a year ago
The value of work starting on site in the three months to June was 4% lower than during the second quarter of 2016, according to the latest Glenigan Index. However on a seasonally adjusted basis, starts were 10% higher than during first three months of 2017.
Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “The snap general election appears to have disrupted the flow of non-residential projects starting on site during the second quarter, with a number of public sector projects as government announcements were postponed during the pre-election run-up to 8th June and a few private sector clients also appearing to have deferred decisions on projects until after the election. We anticipate that these delayed projects will provide a boost to starts over the coming months as work gets underway post-election.
“Non-residential projects were 14% down on a year ago. The decline was led by a continued weakening in retail projects. In addition there were sharp declines in education, health and community & amenity projects that may be due in part to announcements on public sector projects being temporarily delayed by the snap general election. In contrast there has been a further strengthening in office and industrial building projects starting on site.
“Private residential starts strengthened during the second quarter. On a seasonally adjusted basis the value of starts was 21% up on the first three months of the year. The rise is despite quieter conditions in the wider housing market and put starts 14% up on a year earlier. A pick up in social housing starts during June helped counter earlier weakness, leaving starts for the second quarter unchanged on a year ago.
“Civil engineering starts during the three months to June were 29% down on a year ago, reflecting a weakening in both infrastructure and utilities work.
There were sharp variations in project starts across the country. Whilst most parts of the UK have seen a decline in project starts, the North West and South West and Yorkshire & the Humber saw a marked strengthening in starts, with increases of 21%, 12% and 24% respectively against a year ago. In contrast the North East, West Midlands, Wales and Northern Ireland saw the sharpest declines, with falls of 21%, 23%, 16% and 52% respectively.
Glenigan Indices (underlying* projects up to £100 million)
|
|
Glenigan Index |
Residential |
Non-residential |
Civil engineering |
||||
|---|---|---|---|---|---|---|---|---|
|
|
Index |
% Change |
Index |
% Change |
Index |
% Change |
Index |
% Change |
|
Jun-16 |
135.8 |
7% |
146 |
9% |
133 |
22% |
119 |
-34% |
|
Jul-16 |
136.2 |
7% |
157 |
17% |
125 |
8% |
118 |
-23% |
|
Aug-16 |
141.7 |
5% |
176 |
17% |
121 |
1% |
126 |
-20% |
|
Sep-16 |
142.0 |
-4% |
186 |
11% |
115 |
-12% |
123 |
-26% |
|
Oct-16 |
142.3 |
-9% |
184 |
4% |
115 |
-18% |
131 |
-18% |
|
Nov-16 |
129.0 |
-16% |
155 |
-8% |
114 |
-21% |
114 |
-26% |
|
Dec-16 |
106.4 |
-10% |
127 |
-5% |
95 |
-11% |
91 |
-24% |
|
Jan-17 |
118.3 |
-5% |
134 |
-10% |
115 |
8% |
83 |
-35% |
|
Feb-17 |
118.3 |
3% |
151 |
11% |
106 |
10% |
69 |
-47% |
|
Mar-17 |
133.0 |
-1% |
160 |
5% |
120 |
-1% |
109 |
-23% |
|
Apr-17 |
114.5 |
-9% |
143 |
10% |
98 |
-18% |
97 |
-31% |
|
May-17 |
125.2 |
-5% |
147 |
5% |
116 |
-8% |
97 |
-24% |
|
Jun-17 |
129.8 |
-4% |
166 |
14% |
114 |
-14% |
85 |
-28% |
Note: *, underlying projects are valued over £250,000 and under £100 million
r – Revised, p – Provisional. Percentage change is against the same period of previous year.
Source: Glenigan
Note on the statistics
The Glenigan Index of project starts provides a leading indicator of construction activity in the UK. It is based on data collected about every construction project which started on site during the previous three-month period. The Index covers civil engineering, office and commercial projects over £250,000 and more than 10 units for residential property. It excludes any project over £100 million.