Drop in private housing and civil engineering work lowers construction starts

• Starts in the three months to November were 4% down on a year ago and 7% lower than during the preceding three months.
• Residential starts were 12% lower than a year ago and 8% down on the preceding three months.
• Non-residential project starts were 7% higher than a year ago with growth driven by increases in industrial, retail, hotel & leisure and health starts.
• Civil engineering was 13% lower than a year ago and 21% down on the preceding three months.

The value of work starting on site in the three months to October was 4% lower than a year ago, according to the latest Glenigan Index. On a seasonally adjusted basis, starts were 7% down on the three months to August.

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “A weakening in the value of project starts during November, in particular fewer higher value projects, prompted a 7% decline in the Glenigan Index for November against the preceding three months. The decline in the index was led by falls in private housing and civil engineering work. However, there was a rise in non-residential project starts, supported by a strengthening in industrial, hotel & leisure and health sector activity.

“Quieter conditions in the wider housing market appear to be restraining private housing project starts, with developers focussing more on building out existing sites. Private residential starts during the three months to November were 15% down on the same period a year ago. On a seasonally adjusted basis starts were 13% down on the three months to August. Whilst current political and economic uncertainties are expected to delay project starts in the near term, the recent extension of Help to Buy to 2023 will help support project starts over coming year. Social housing starts have recovered, rising by 14% against the three months to August to match the levels seen a year ago.

“Overall non-residential projects slipped back 2% against the preceding three months on a seasonally adjusted basis but were still 7% higher than a year ago. Starts were boosted by sharp increases in industrial, retail and health projects. Recent growth in office and education starts has been reversed: Office projects slipped back 11% against the previous three months and were little changed on a year ago. Education starts dropped 20% against the previous three months to stand 17% down on a year ago.

“Civil engineering starts were 13% down on a year ago and 21% lower than during the preceding three months on a seasonally adjusted basis. The retrenchment was sharpest in the utilities sector with starts 19% lower than a year ago, while infrastructure starts were down by 11% over the same period.”

Regionally, growth in project starts was confined to the East of England, West Midlands and Yorkshire & the Humber which saw increases of 31%, 42% and 25% respectively against a year ago. Starts in the North East and the South East were little changed on a year ago. Other parts of the UK all saw a double digit decline in project starts.

[1] See notes for definition of underlying starts

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

Note: *, underlying projects are valued over £250,000 and under £100 million