Rise in private sector work lifts construction starts

• Starts in the three months to September were 10% up on a year ago and 12% higher than during the preceding three months.
• Residential starts were 11% higher than a year ago, supported by a rise in private housing project starts.
• Non-residential project starts were 13% higher than a year ago with increases in industrial, offices, retail and health starts more than offsetting weakness in other sectors.
• Civil engineering was 2% lower than a year ago.

The value of work starting on site in the three months to September was 10% higher than a year ago, according to the latest Glenigan Index. On a seasonally adjusted basis, starts rose by 12% against the three months to June.

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “The upturn in the value of underlying projects starting on site during the third quarter is encouraging and follows a subdued first half to 2018. The latest Glenigan Index for September was 10% up on a year ago. The Index reveals a general rise in private residential and non-residential building projects starting on site during the last three months, most notably in private housing, offices, industrial and retail projects. The health sector has also been stronger.

“Housebuilders appear to be making up for activity lost to poor weather during the first half of the year. Private residential starts during the three months to September were 17% up on the same period a year ago. On a seasonally adjusted basis starts were 16% up on the three months to June. Social housing starts were 9% down on a year ago, but were 12% ahead of the second quarter on a seasonally adjusted basis.

“Overall non-residential projects were 11% higher than a year ago and 13% up against the second quarter on a seasonally adjusted basis. September saw a sharp rise in the value of underlying offices, retail and health projects starting on site. An overall increase in starts in these sectors during the three months to September, together with an increase in industrial starts more than offset weakness elsewhere.

“The recent upturn in civil engineering activity lost momentum during the third quarter, with the value of underlying starts during the three months to September 1% up against the preceding three months (seasonally adjusted) and 2% lower than the same period last year. Recent growth has been primarily driven by a marked rise in utilities projects, but after a strong second quarter utilities projects slipped by 37% on a seasonally adjusted basis and were 15% down on a year ago.”

The north of England has seen the strongest growth. Projects starts in the North West and North East were up by 59% and 75% respectively on a year ago. Starts in the capital were also 15% ahead of a year ago, as a rise in office projects during September disrupted the recent downward trend in activity. The East Midlands, Yorkshire & the Humber and Northern Ireland saw a weakening in starts with declines of 13%, 26% and 38% respectively.

[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