Rise in Commercial and industry projects support construction starts

• Starts in the three months to October were 1% up on a year ago and unchanged on the preceding three months.
• Residential starts were 10% lower than a year ago and 4% down on the preceding three months.
• Non-residential project starts were 18% higher than a year ago with growth driven by increases in industrial, offices, retail hotel & leisure and health starts.
• Civil engineering was 19% lower than a year ago and 27% down on the preceding three months.

The value of work starting on site in the three months to October was 1% higher than a year ago, according to the latest Gle5nigan Index. On a seasonally adjusted basis, starts were unchanged on the three months to July.

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “The latest data reveals a stabilisation in overall construction project starts, with the Glenigan Index for October unchanged on the preceding three months and up just 1% on a year ago. A strengthening in commercial, industrial and health projects starting on site has been offset by a weakening in private housing starts and a drop in civil engineering activity.

“October saw a renewed weakening in private housing starts, reversing the recent upturn in project residential starts. Private residential starts during the three months to October were 15% down on the same period a year ago. On a seasonally adjusted basis starts were 13% down on the three months to July. Hopefully, measures announced in the Budget, including the extension of Help to Buy to 2023, will help bolster project starts over the coming months. Social housing starts have strengthened, rising by a third against the three months to July to stand 11% up on a year ago.

“Overall non-residential projects were 18% higher than a year ago and 11% up against the preceding three months on a seasonally adjusted basis. Starts were boosted by sharp increases in retail and hotel & leisure projects. In addition, the industrial, office and health sectors remain firm and well ahead of weak performances a year ago.

“The recent upturn in civil engineering activity has lost momentum. The value of underlying starts during the three months to October was 27% down against the preceding three months (seasonally adjusted) and 19% lower than during the same period last year. Earlier growth in utilities work has not been sustained, with starts 29% lower than a year ago. Infrastructure starts were little changed on the preceding three months, but 13% down on a strong performance a year ago.”

Project starts remain firm across the north of England, with the North West, North East and Yorkshire & the Humber seeing increases of 6%, 8% and 31% respectively. At 44%, however, the West Midlands enjoyed the sharpest rise in starts. In contrast the East Midlands, London, Wales, Scotland and Northern Ireland saw a weakening in starts with declines of 18%, 11%, 28%, 31% and 19% 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