Commercial & Industrial lift for construction in June

• Starts in the three months to June were unchanged against the preceding three months and 2% up on year ago.
• Residential starts slipped 1% against the preceding three months and were 4% lower than a year ago.
• Non-residential project starts were 11% higher than a year ago, lifted by increases in industrial, office and retail work.
• Civil engineering starts slipped by 28% against the preceding three months and was 7% down on a year ago.

The value of work starting on site during the three months to June was 2% higher than a year earlier, according to the latest Glenigan Index. Starts were also 3% up on the previous three months on a seasonally adjusted basis.

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “Projects starts strengthened in the second quarter. The rise has been led by an increase in private non-residential work, suggesting that some developers have brushed off the continued political uncertainty surrounding the UK’s delayed departure from the EU. In contrast government funded areas such as health and education remained weak. Private housing project starts also softened during the second quarter while a decline in utilities work dragged civil engineering starts lower.

“The recent strengthening in private residential starts faded during the three months to June. Private housing starts slipped 4% during the three months to June against the preceding three months on a seasonally adjusted basis and were 12% down on a year ago. In contrast the recent turnaround in social housing starts has been maintained, with starts jumping 14% against first quarter to stand 19% up on a year ago.

“Overall non-residential projects rose 8% against the preceding three months on a seasonally adjusted basis and were 11% higher than a year ago. Private sector starts picked up during the second quarter with industrial, office and retail and work rising by 33%, 49% and 52% respectively against a year ago. The sharp rise in the value of retail starts was driven by a large shopping centre project and is against a poor performance a year ago. In contrast government funded sectors remain weak, with education starts 1% down on a year ago and health and community & amenity sectors falling by 39% and 13% respectively.

“Civil engineering starts slipped by 28% against a strong performance during the three months to March on a seasonally adjusted basis and were 7% lower than on a year ago. The year-on-year drop in project starts was led by a 32% decline in utilities projects against a year earlier. This was partially offset by a 10% increase in infrastructure work” 

London was the best performing part of the UK during the second quarter, with starts 26% up on a year ago. This is a welcome contrast to the decline in work in the capital over the last two years. The South East, West Midlands and Yorkshire & the Humber also enjoyed double digit growth, rising by 12%, 11% and 28% respectively. The value of starts grew more modestly in the North East and Scotland. In contrast, the value of starts in East Midlands, East of England, Northern Ireland, North West, South West and Wales. South West and North West, Northern Ireland and Scotland were 3%, 8%, 18%, 32%, 2% and 3% lower than a year ago.

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