Civils bright spot against slowdown in building projects

• Starts in the three months to July were 15% down on a year ago and were 1% lower than during the on the preceding three months.
• Residential starts were 20% lower than a year ago with a weakening in both private and social housing projects.
• Non-residential project starts were 18% lower than a year ago due to a marked weakening in education and commercial project starts.
• Civil engineering was 35% higher than a year ago due to strengthening in both infrastructure and utilities projects.

The value of work starting on site in the three months to July was 15% lower than a year ago, according to the latest Glenigan Index. On a seasonally adjusted basis, starts were 1% lower than during the three months to April.

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “The value of underlying projects starting on site remains subdued. The latest Glenigan Index for July was 15% down on a year ago and little changed on the weak level of starts seen so far in 2018. The Index reveals a general decline in residential and non-residential building project starting on site during the last three months, most notably in social housing, commercial, education and community projects. However against this downward trend, industrial project starts were little changed on a year ago and there has been a strengthening in health and civil engineering work.

“Private residential starts during the three months to July were 11% down on the same period a year ago. On a seasonally adjusted basis starts were 9% up on the preceding, weather disrupted, three months to April. Social housing starts fell away sharply, being 13% down on the February to April on a seasonally adjusted basis and 40% lower than a year ago.

“Overall non-residential projects were 18% lower than a year ago and 10% down against the three months to April on a seasonally adjusted basis. Sharp declines in office, retail and education starts contributed to the decline against the preceding three months. Year on year double digit declines in retail, office, education and community & amenity projects overshadowed a 50% rise in health project starts.

“Civil engineering has been a bright spot over the last three months, with starts during the three months to July were 35% up on a year ago and 39% up on the three months to April (seasonally adjusted). The year on year rise was driven by a 12% rise in Infrastructure starts and an 80% jump in utilities work.”

The overall weakening in starts was not felt uniformly across the country. London saw the sharpest decline in starts, being 45% down on a year ago. The South East, East of England, Yorkshire & the Humber, Northern Ireland and Scotland also saw double digit falls of 16%, 18%, 30%, 37% and 11% respectively. In contrast the value of project starts in the East Midlands was 41% up on a year ago and was 14% higher in both the West Midlands and North East.

[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