Snap General Election freezes construction starts

• Starts in the three months to December were 15% down on the previous three months (seasonally adjusted) and 19% lower than a year ago.
• Residential starts were 29% down on the preceding three months and 27% lower than a year ago.
• Non-residential project starts were little changed on the previous three months, but 12% down on a year ago with most sectors seeing year on year declines.
• Civil engineering starts were 16% down on the preceding three months and 17% lower than a year ago.

The value of work starting on site during the final quarter of 2019 fell 15% against the previous quarter on a seasonally adjusted basis and was 19% down on a year earlier, according to the latest Glenigan Index. 

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “Amid a period of shifting Brexit dates and a snap General Election, the value of project starts dropped markedly during the final three months of the year. The announcement of government projects were held up during the election period, while some private clients paused planned projects. Residential project starts fell back 29% during the final three months of 2019 to stand 27% down on year ago. Non-residential starts were 12% down on a year ago. Civil engineering starts were down on both the previous three months and a year ago.

“Private residential starts weakened during the three months to December. Private housing starts fell by 24% during the three months to December against the preceding three months on a seasonally adjusted basis and were 25% down on a year ago. Social housing starts also slipped back, falling by 39% against the previous three months and were down by a third on a year ago.

“Overall non-residential projects were 1% up on the preceding three months on a seasonally adjusted basis but were 12% lower than a year ago. Government funded areas, including education, health, and community & amenity all fell back during the final quarter as the snap election temporarily disrupted the flow of work. Office starts also slipped back on the preceding quarter. Industrial, office, and hotel & leisure starts were 15%, 14% and 19% down respectively against a year ago, but retail starts recovered from recent sharp falls and were 7% higher than a year ago. Education starts were 17% lower than a year ago, while health projects were unchanged on a year ago.

“Civil engineering starts dropped by 17% against the three months to September on a seasonally adjusted basis and were 17% down on a year ago. The year-on-year fall in project starts was primarily driven by a 24% drop in infrastructure work.”

The South East was the best performing region during the three months to December, with starts rising by 2% on a year ago. All other parts of the country saw a decline in projects starts. The sharpest falls were in the North East, East of England, East Midlands and Yorkshire & the Humber with declines of 33%, 23%, 27% and 44% respectively.

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