May growth in Construction projects starts

• Starts in the three months to May rose 6% against the preceding three months and were 8% higher than a year ago.
• Residential starts were 12% up on the preceding three months and 10% higher than a year ago.
• Non-residential project starts were 3% higher than a year ago, lifted by a rise in industrial and retail work.
• Civil engineering starts slipped by 10% against the preceding three months but were 24% higher than a year ago.

The value of work starting on site during the three months to May was 8% higher than a year earlier, according to the latest Glenigan Index. Starts were also 6% higher against the previous three months on a seasonally adjusted basis.

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “Projects starts have strengthened in recent months, brushing off current political indecision and uncertainty. Residential, non-residential and infrastructure starts in May were all up on a year ago. The private sector and infrastructure projects provided much of the growth alongside a rise in social housing work, while government funded areas such as health and education remained weak. 

“Private residential starts strengthened during the three months to May. Project starts had been weakening since last autumn against a backdrop of fewer property transactions and weaker house price inflation in the wider housing market. However private housing starts rose 8% during the three months to May against the preceding three months on a seasonally adjusted basis and were 2% up on a year ago. The turnaround in social housing starts after a weak first quarter is more dramatic, with starts jumping 24% against the three months to February to stand 32% up on a year ago.

“Overall non-residential projects rose 5% against the preceding three months on a seasonally adjusted basis and were 10% higher than a year ago. Private sector starts have picked up with industrial, retail and hotel & leisure work rising during the three months to May rising by 11%, 116% and 7% respectively against a year ago. The doubling of the value of retail starts was driven by two shopping centre projects. In contrast government funded sectors remain weak, with education starts 5% down on a year ago and health and community & amenity sectors dropping by 19% and 45% respectively. 

“Civil engineering starts slipped 10% against a strong performance during the three months to February on a seasonally adjusted basis, but were still 24% higher than on a year ago. The year-on-year rise in project starts was driven by a 49% rise in infrastructure work, while utilities projects slipped 10% against a year earlier.”  

Growth was largely focussed along the east of the country, with London, South East, North East, East of England and Yorkshire & the Humber all enjoying double digit growth of 59%, 11%, 47%, 25% and 26% respectively. Wales also saw a 30% rise in project starts. In contrast, the value of starts in East Midlands, South West and North West, Northern Ireland and Scotland were 18%, 11%, 34%, 37% and 7% lower than a year ago. 

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