Coronavirus lockdown weakens construction starts

• Starts were 15% down on a year ago, but were unchanged against the preceding three months on a seasonally adjusted basis during the three months to March.
• Residential starts fell 10% against a year ago, however climbed 15% against the preceding three months.
• Non-Residential starts slipped back, declining 10% against the preceding three months and by 17% against a year ago.
• Civil engineering project starts dropped sharply, by 10% on the preceding three months and by 26% on a year ago.

The value of work starting on site during the three months to March were down 15% against a year ago but were unchanged on the preceding three months on a seasonally adjusted basis, according to the latest Glenigan index.

Rhys Gadsby, Glenigan’s Economic Analyst, commented on this month’s figures. “The latest Glenigan Index reveals that construction starts failed to recover during the first quarter from the low point seen during the closing months of 2019, as falls in non-residential and civil engineering work overshadowed a rise in housing starts. The final two weeks of March saw sites impacted by the Coronavirus lockdown, cutting project starts during the first quarter. A more significant downturn in project starts is expected in next month’s Index as the lockdown continues to disrupt starts during April.

“Residential starts fell during the three months to March against the previous year, but recovered from the performance in the fourth quarter. Whilst private housing project starts fell 6% against the previous year, starts climbed 8% compared with the preceding three months on a seasonally adjusted basis. Social housing starts climbed 43% against the previous three months on a seasonally adjusted basis, although they remained 21% down on a year ago.”

“Non-residential projects fell against the preceding three months on a seasonally adjusted basis and against a year ago, falling by 10% and 17% respectively. Retail projects contributed to this decline dropping by 36% on a year ago and by 18% against the preceding three months on a seasonally adjusted basis. Industrial starts also saw a dramatic decline, with starts down 22% on the preceding three months (seasonally adjusted) and down 34% on the previous year. All sectors saw declines against a year ago, except for Community & Amenity, where the value of starts was up 53% compared with a year ago.”

“Civil engineering starts were down 10% on the preceding three months on a seasonally adjusted basis and were 26% lower than a year ago. Utilities starts were 20% lower than a year ago and were 19% down on the preceding three months on a seasonally adjusted basis. Infrastructure project starts significantly dropped against a year ago, being 29% down. Against the preceding three months on a seasonally adjusted basis, infrastructure starts were down 4%.”

“The majority of regions saw double-digit decline in starts on a year ago. The North East, East Midlands and South West saw the greatest falls, with drops of 36%, 34% and 33% respectively. London, the North West, South East, and Yorkshire also saw significant declines. Bucking the trend were the East of England and Scotland, seeing a 26% and 5% rise, respectively, in starts on a year ago. The two regions were the only ones to see growth against a year ago.”

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