Industrial

Industrial

Industrial – Overview

Project-starts, main contract awards and detailed planning approvals experienced declines against the previous quarter and last year. However, underlying approvals experienced some growth.

During the first quarter of 2023 industrial project-starts fell 42% against the preceding three months to stand 59% down on a year ago, totalling £1,107 million. Major projects (£100 million or more) totalled £129 million during the period, a 71% decrease on the preceding three months, but an improvement from the previous year when there were no major starts. Totalling £978 million, underlying industrial work starting on-site (less than £100 million in value) halved against the previous quarter on a seasonally adjusted (SA) basis to stand 64% lower than a year ago.

Totalling £1,873 million, main contract awards decreased 9% against the preceding quarter and stood 21% down against last year. Underlying industrial main contract awards at £1,523 million, decreased 13% (SA) against the preceding quarter and by 12% against a year ago. Major project contract awards totalled £350 million during the period, an 11% decrease against the previous quarter, to stand 44% down on a year ago.

Industrial detailed planning approvals totalled £3,040 million, having decreased 10% on the previous three months, to stand 1% down on last year. Major projects totalled £200 million, an 84% decline on the preceding three months, and 58% lower than the previous year. Underlying project approvals performed better, having increased 37% (SA) against the final quarter of 2022 and 9% compared with a year ago, totalling £2,840 million.

Industrial – Types of Projects Started

Manufacturing work starting on-site added up to £727 million, a 51% fall compared with the previous year. Despite the decline, manufacturing still accounted for 66% of industrial project-starts during the three months to March.

Warehousing & logistics project-starts decreased 66% against the previous year to total £355 million, accounting for 32% of the sector. Other industrial projects slipped back 88% against the previous year, which brought it down to a total of £25 million and a 2% share of the whole sector.

Regional Analysis – Project-Starts

All regions experienced a slump in industrial project-starts against the 2022 levels. The West Midlands accounted for 24% of industrial work starting on-site during the first quarter of 2023, with the value adding up to £270 million, making it the most active region, thanks to a relatively small decrease of 14%. The South East had the least sharp decline (-11%), totalling £226 million, which accounts for 20% of the sector. The East of England had the same share of project-starts, totalling £222 million, which is 41% lower than last year. Further decline was prevented by a £129 million warehouse in Stowmarket (Project ID: 22277749).

The North West fared even worse, having decreased 56% against the preceding year, to total £115 million, a 10% share of industrial project-starts. Adding up to £64 million, project-starts in the South West fell 77% to account for 6% of the total value. The East Midlands experienced by far the steepest decline of 91%, with project-starts totalling £44 million, to account for a 4% share.

Industrial Project-Starts during the three months to March 2023

Unlike project-starts, the overwhelming majority of regions experienced a growth in industrial detailed planning approvals during the first quarter of 2023. Scotland was the most active region, accounting for a 13% share of all consents, having increased 30% on last year, bringing its total value up to £440 million. This growth was boosted by the £200 million Frigate Factory shipbuilding assembly hall in Glasgow (Project ID: 22361754). Not far behind with a 13% share of the sector at £387 million, Scotland tripled against 2022 levels, which is the highest growth among all regions.

The West Midlands (£374 million) and the South East (£373 million) each accounted for 13% of approvals with the value increasing 14% and 3% respectively against the previous year. Consents in the North West totalled £347 million during the first quarter of 2023. This is 4% higher than 2022 levels and accounts for an 11% share of industrial approvals.  The East of England accounted for a tenth of the sector, with approvals increasing 11% on the previous year to total £291 million. Projects in the region included the £80 million Prologis Park logistic centre and training hub in Luton (Project ID: 21101014).

Industrial Detailed Planning Approvals during the three months to March 2023

Forecast Construction-Starts for Industrial

Note: Underlying projects are schemes with a construction value of £250,000 to £100 million.  Forecast updated in April 2023 p – provisional, f – forecast.
Source: Glenigan