West Midlands

Overview

Project starts and main contract awards weakened against the previous year. On a more positive note, detailed planning approvals performed relatively strongly against 2022 levels and the preceding quarter.

Work starting on-site in the West Midlands added up to £1.153bn during the quarter to March, a 3 per cent increase compared with the preceding quarter but a 47 per cent fall against the previous year.  A total absence of any major project-starts (£100m or more) exacerbated the decline. Underlying project-starts (less than £100m in value) also performed poorly, falling 24 per cent against the preceding quarter on a seasonally adjusted (SA) basis to stand 42 per cent down on a year ago.

Totalling £1.528bn, main contract awards in the West Midlands decreased 6 per cent compared with the preceding quarter and 46 per cent against the previous year. Major project contract awards totalled £158m during the period, an increase on the preceding quarter where no major projects reached the main contract award stage but a 84 per cent fall on last year’s levels. Underlying contract awards, at £1.37bn also performed poorly, having decreased 12 per cent (SA) against the preceding quarter and 26 per cent against a year ago.

Detailed planning approvals in the West Midlands added up to £1.904bn during the period, a 53 per cent decrease on the preceding quarter to stand 8 per cent up on the previous year. Major project approvals totalled £330m, a 230 per cent increase on the preceding quarter and a 202 per cent increase on the previous year. At £1.574 bn, underlying detailed planning approvals grew 33 per cent (SA) against the preceding quarter to remain 5 per cent down on a year ago.

Sector Analysis – Project-Starts

Private housing accounted for 30 per cent of work starting on-site in the West Midlands during the quarter to March with the value adding up to £342m. Despite this, private housing-starts fell 71 per cent compared with a year ago. Industrial at £270m followed a similar trend, experiencing a 14 per cent decrease against the previous year to account for 23 per cent of the total value. Industrial was the second most active sector in the region. Education project-starts also fared poorly, decreasing 43 per cent against the previous year to total £80m, a 7 per cent share of the total value of project-starts in the West Midlands.

Community & Amenity accounted for 10 per cent of commencements on-site, but it bucked the trend, experiencing a four-digit increase against 2022 levels, with the value adding up to £116m. This was predominantly due to the £95m prison expansion project in Rugby (Project ID: 19039813). Utilities also experienced a relatively strong period, increasing 140 per cent on the previous year to total £33m, a 3 per cent share of the total value. Infrastructure at £80m was the only other growth sector, experiencing a 69 per cent increase against the previous year to account for 7 per cent of the total value.

Value of Project-Starts in the West Midlands during the three months to March 2023 by sector

Sector Analysis – Detailed Planning Approvals

Private housing accounted for the greatest proportion of detailed planning approvals (36 per cent) in the West Midlands, with the value adding up to £686m. Despite this, private approvals decreased 8 per cent against last year’s levels. Social Housing approvals, accounting for 12 per cent of the region also performed poorly, declining 14 per cent compared with the preceding year to total £223m.

Industrial was the second most active sector, accounting for 20 per cent of consents, the sector experienced an increase of 14 per cent against 2022 levels to total £374m. Offices at £292m experienced the sharpest growth of any sector, with the value of planning approvals increasing 406% per cent against the previous year.  The increase was almost solely driven by the approval of the £200m “Typhoo Wharf Redevelopment” in Birmingham (Project ID: 02345442). Offices accounted for 15 per cent of the total value, the third most active sector in the region.

Value of project approvals in the West Midlands during the three months to March 2023 by sector

Forecast Construction-Starts for West Midlands

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