Project starts weaken further

• Starts in the three months to May were 12% down on a year ago and were 27% lower than during the on the preceding three months.
• Residential starts were 12% lower than a year ago with a weakening in both private and social housing projects.
• Non-residential project starts were 10% lower than during the three months to May 2017 due to a marked weakening in industrial and commercial project starts.
• Civil engineering was 27% lower than a year ago due to declines in both infrastructure and utilities work.

The value of work starting on site in the three months to May was 12% lower than a year ago, according to the latest Glenigan Index. On a seasonally adjusted basis, starts fell by 27% against the three months to February.

The decline in the Glenigan Index for May disappointing. The Index has tracked a progressive decline in the value of underlying[1] starts in recent months and the May Index indicates that the industry has yet to recover from earlier disruption and delays arising from adverse weather conditions and Carillion’s collapse. The Index reveals a widespread decline in project starts during the last three months, with education and community & amenities being the only sectors to record firm year on year growth.

Private residential starts during the three months to May fell 23% against the preceding three months on a seasonally adjusted basis and were 14% down on the same period a year ago. Social housing starts also fell away, being down by almost a third on December to February on a seasonally adjusted basis and 18% lower than a year ago.

Overall non-residential projects were 12% lower than a year ago and 26% down against the three months to February on a seasonally adjusted basis. Sharp declines in retail and hotel & leisure starts contributed to the decline against the preceding three months. Year on year double digit declines in industrial, retail and office projects overshadowed an 18% rise in education and 19% rise in community & amenity project starts.

“Civil engineering starts during the three months to May were 27% down on a year ago, with the value of underlying infrastructure starts dropping 22% and utilities 35% lower.”

Regionally the East and West Midlands, the North West of England and Northern Ireland saw a rise in the value of underlying construction starts during the three months to May, with the value of starts increasing by 17%, 3%, 8% and 9% respectively against a year ago. Starts fell back in other parts of the UK. The capital saw the sharpest decline, with starts 42% down on a year ago. Starts were down by 30% in the North East, while starts were over 20% down in Wales and Yorkshire & the Humber.

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

Note: *, underlying projects are valued over £250,000 and under £100 million