Construction starts weakening

• Starts in the three months to October were 12% down on a year ago and 14% lower than during the previous three months (seasonally adjusted).
• Residential starts were 19% down on the preceding three months and 13% lower than on a year ago.
• Non-residential project starts were 14% down on a year ago, with most sectors seeing declines.
• Civil engineering starts were 12% higher on a year ago, despite a 25% drop against the preceding three months.

The value of work starting on site during the three months to October was 14% down on the previous three months on a seasonally adjusted basis and 12% lower than a year earlier, according to the latest Glenigan Index.

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “A weak performance during October has dragged down the value of work started during the last three months. Residential project starts have fallen back 19% over the last three months to stand 13% down on year ago. Non-residential starts have fallen back sharply with sharp falls in both private and publicly funded areas. Civil engineering starts were down sharply on the previous three months, but were up against a year ago due to rise in utilities starts.

“Private residential starts weakened during the three months to October. Private housing starts fell by 20% during the three months to October against the preceding three months on a seasonally adjusted basis and were 14% down on a year ago. Social housing starts also slipped back, falling by 15% against the previous three months and were 8% lower than a year ago.

“Overall non-residential projects fell 6% against the preceding three months on a seasonally adjusted basis and were 14% lower than a year ago. Industrial and commercial sector starts have declined sharply over the last three months. Industrial, retail and hotel & leisure starts were 18%, 28% and 29% down respectively against a year ago, but office starts were 5% higher. Education starts were 14% lower than a year ago, while health projects were little changed and community & amenity was a bright spot, rising by 11% against year ago.

“Civil engineering starts dropped by 25% against the three months to July on a seasonally adjusted basis but were 12% up on a year ago. The year-on-year rise in project starts was driven by an 56% increase in utilities, while infrastructure project starts were unchanged on a year ago.”

The East Midlands and Northern Ireland were the best performing parts of the UK during the three months to October, with starts rising by 30% and 20% respectively on a year ago. The East of England saw a 3% rise in starts. The value of underlying projects starts fell in all other parts of the UK. The sharpest falls were in the West Midlands and the South West with declines of 39% and 27% respectively. In addition, London, North East, South East, Wales and Yorkshire & the Humber saw double digit declines of 16%, 16%, 11%, 18%, and 21% respectively.

Glenigan Indices (underlying* projects up to £100 million)