North East

Overview

Project-starts, main contract awards and detailed planning approvals all decreased on the previous quarter and last year’s levels.

Totalling £919m, work starting on-site in the North East decreased 21 per cent during the three months to March and remained 34 per cent lower than a year ago. Major projects (£100m or more) starting on-site at £430m, decreased 26 per cent against the preceding three months and stood 25 per cent down on the previous year. Underlying project-starts (less than £100m in value) had declined 46% against the preceding three months on a seasonally adjusted (SA) basis and 41 per cent against the previous year.

Main contract awards in the North East added up to £907m, a 14 per cent decline compared with the preceding three months to stand 26 per cent lower than a year ago. At £200m major project contract awards also decreased, falling 53 per cent against the preceding three months and 3 per cent compared with last year’s levels. Underlying contract awards increased 1 per cent (SA) per cent against the preceding three months but declined 31 per cent compared with a year earlier, totalling £707m.

Detailed planning approvals slipped back 34 per cent during the three months to March and 7 per cent against the previous year to total £1bn. There were no major project approvals during the period, down from the preceding quarter and previous year.  More positively, underlying approvals, grew 24 per cent (SA) against the preceding three months, and the value increased 1187 per cent against the previous year.

Sector Analysis – Project-Starts

The social housing sector dominated the region in terms of project-starts during the three months to March, with the value increasing four-digits against the previous year to total £334m. The sector accounted for 36 per cent of the total value of project-starts, with its dominance almost solely being driven by a £250m housing improvement scheme in Newcastle (Project ID: 21573478). Utilities at £29m also experienced a four-digit increase, but the sector only accounted for 3 per cent of the total value.

Offices accounted for the second highest proportion of work starting on-site (21 per cent), with the value of work having increased by 325 per cent compared with a year ago to total £195m. However, private housing at £172m didn’t fare as well, the value of project starts declined 70 per cent to account for 19 per cent of the total value.

Value of project-starts in the North East during the three months to March 2023 by sector

Sector Analysis – Detailed Planning Approvals

Private housing was the most active sector in the region for detailed planning approvals, accounting for 33 per cent of the total value. Despite this, the sector experienced a 26 per cent decrease against 2022 levels to total £331m.  Accounting for just 1 per cent of consents, infrastructure experienced a particularly weak period, with the value slipping back 92 per cent to total £9m.

At £165m, industrial experienced a particularly strong period, with the value of planning approvals increasing 119 per cent against the previous year.  Industrial was the second most active sector in the region, accounting for 16 per cent of the total value. Education at £148m, experienced the sharpest increase (+199 per cent) of any sector in the region. Education accounted for 15 per cent of the total value.

Value of project approvals in the North East during the three months to March 2023 by sector

Forecast Construction-Starts for the North East

Note: Underlying projects are schemes with a construction value of £250,000 to £100 million.  Forecast updated in April 2023 p – provisional, f – forecast.
Source: Glenigan