West Midlands

West Midlands – Overview

The West Midlands experienced a poor Q4 2022, with project-starts, main contract awards and detailed planning approvals all declining on the previous year and preceding quarter.

Work starting on-site in the West Midlands added up to £973m during Q4 2022, a 53 per cent decline compared with the preceding quarter and 68 per cent fall against the previous year.  A total absence of any major (£100m or more) project-starts exacerbated the decline. Underlying (less than £100m in value) project-starts also performed poorly, falling 29 per cent against the preceding quarter on a seasonally adjusted basis to stand 23 per cent down on a year ago.

Totalling £1.6bn, main contract awards in the West Midlands by half compared with the preceding quarter and 26 per cent against the previous year. Major project contract awards totalled £200m during the period, an 80 per cent decline on the preceding quarter and a 46 per cent fall on 2021 levels. Underlying contract awards, at £1.4bn also performed poorly, having decreased 48 per cent (SA) against the preceding quarter and 22 per cent against a year ago.

Detailed planning approvals in the West Midlands added up to £1.3bn during the period, a 32 per cent decrease on the preceding quarter to stand 42 per cent down on the previous year. Major project approvals totalled £100m, a 60 per cent decrease on the preceding quarter and a 78 per cent decrease on the previous year. At £1.2bn, underlying detailed planning approvals decreased 45 per cent (SA) against the preceding quarter to stand 33 per cent lower than a year ago.

Sector Analysis – Project-Starts

Private housing accounted for almost half (42 per cent) of work starting on-site in the West Midlands during the Q4 2022 with the value adding up to £412m. Despite this, private housing-starts fell 42 per cent compared with a year ago. A further decrease was prevented by the £85 million ‘Swans Landing’ scheme in Stratford-On-Avon (Project ID: 16450549). Industrial project-starts also suffered, decreasing 57 per cent against the previous year to total £200m. Industrial was the second-most active sector in the region, accounting for 21 per cent of project-starts. Infrastructure (-97 per cent) experienced the steepest fall compared with a year ago to total £50m, a 5 per cent share of the total value.

Some sectors bucked the trend, one being education which, at £65m, experienced triple-digit growth (+185 per cent) against 2021 levels to account for a 7 per cent share of the total value. Utilities (+157 per cent) and Hotel & Leisure (+176 per cent) also  experienced triple-digit growth, with starts totalling £26m and £49m respectively.

Value of Project-Starts in the West Midlands during Q4 2022 by sector

Sector Analysis – Detailed Planning Approvals

Private housing also accounted for the greatest proportion of detailed planning approvals (41 per cent) in the West Midlands, with the value adding up to £412m. Despite this, private approvals more than halved (-58 per cent) against 2021 levels.. Industrial approvals, accounting for 12 per cent of the region, also weakened (-50 per cent) compared with 2021 levels to total £159m. community & amenity experienced the sharpest decrease of any sector, with the value having fallen 73 per cent against the previous year to total £8m.

In contrast, office detailed planning approvals performed well having increased 305 per cent compared with a year earlier to total £159m. The sector accounted for 12 per cent of the total value, being boosted by the approval of the £24m extension to the ‘MIRA Technology Park’ in Warwickshire (Project ID: 22353989). Retail approvals, accounting for 2 per cent of the total value, also experienced triple-digit growth (+167 per cent) against 2021 levels to total £30m. Utilities at £59m also bucked the trend, with the value of approvals almost doubling (+90 per cent) against 2021 levels to account for a 5 per cent share of the total value.

Value of project approvals in the West Midlands during Q4 2022 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 November 2022 p – provisional, f – forecast.
Source: Glenigan