Poor weather holds back project starts
- Starts in the three months to April were 4% down on a year ago and down by a quarter on the preceding three months.
- Residential starts were 6% lower than a year ago due to a weakening in private housing projects.
- Non-residential project starts were 2% higher than during the three months to April 2017 as a declines in office, retail hotel & leisure and health were offset by increases industrial and education projects.
- Civil engineering was 25% lower than a year ago due to decline in infrastructure projects and sharp fall in utilities work.
The value of work starting on site in the three months to April was 4% lower than a year ago, according to the latest Glenigan Index. On a seasonally adjusted basis, starts fell by a quarter against the three months to January.
The Glenigan Index has recorded a sharp decline in the value of underlying starts in recent months. Projects starts have been disrupted and delayed by the recent adverse weather conditions as well as Carillion’s collapse. On a seasonally adjusted basis projects starts were fell by a quarter against the three months to January and are also down on a year ago. The challenge for the industry will be to make up for lost ground and press on with delayed projects over the summer months.
The upturn in private housing starts during the final quarter of 2017 was reversed during the three months to April. Private residential starts during the three months to April fell 29% against the preceding three months on a seasonally adjusted basis and were 10% down on the same period a year ago. The smaller social housing sector also fell away, being 18% down on November to January on a seasonally adjusted basis, but it was 8% up on a year ago.
Overall non-residential projects were 2% higher than a year ago, but down by 24% against the three months to January on a seasonally adjusted basis. A sharp 58% retrenchment in hotel & leisure sector starts contributed to the decline against the preceding three months. Year on year a weakening in retail, hotel & leisure, office and health projects was outweighed by growth in industrial and educations project starts.
Civil engineering starts during the three months to April were down by a quarter on a year ago. Whilst there was a decline in infrastructure projects, the fall was largely driven by a halving in utilities work.
Regionally the North West of England and the West Midlands were the strongest growth areas with the value of underlying construction starts in both parts of the country 46% higher during the three months to April than a year ago. There was also firm growth in starts in the East Midland (+17%), East of England (+9%) and Scotland (+8%). In contrast the value of project starts fell back sharply in London, the North East, South West, and Wales.
Glenigan Indices (underlying* projects up to £100 million)
|
|
Glenigan Index |
Residential |
Non-residential |
Civil engineering |
||||
|---|---|---|---|---|---|---|---|---|
|
|
Index |
% Change |
Index |
% Change |
Index |
% Change |
Index |
% Change |
|
Apr-17 |
102.5 |
-11% |
124 |
6% |
89 |
-18% |
94 |
-29% |
|
May-17 |
118.0 |
-3% |
138 |
8% |
107 |
-10% |
104 |
-14% |
|
Jun-17 |
122.3 |
-3% |
158 |
18% |
107 |
-13% |
78 |
-31% |
|
Jul-17 |
123.1 |
-4% |
159 |
9% |
109 |
-8% |
73 |
-38% |
|
Aug-17 |
118.8 |
-11% |
164 |
-1% |
94 |
-17% |
87 |
-31% |
|
Sep-17 |
124.6 |
-8% |
164 |
-7% |
101 |
-9% |
108 |
-12% |
|
Oct-17 |
127.0 |
-7% |
173 |
-2% |
99 |
-10% |
109 |
-16% |
|
Nov-17 |
128.5 |
5% |
167 |
14% |
106 |
-1% |
105 |
-7% |
|
Dec-17 |
116.8 |
19% |
156 |
33% |
99 |
13% |
75 |
-15% |
|
Jan-18 |
135.1 |
23% |
172 |
42% |
119 |
10% |
90 |
12% |
|
Feb-18 |
128.1 |
21% |
165 |
26% |
114 |
16% |
77 |
16% |
|
Mar-18 |
132.1 |
10% |
162 |
16% |
118 |
8% |
102 |
-3% |
|
Apr-18 |
97.9 |
-4% |
117 |
-6% |
91 |
2% |
71 |
-25% |
Note: *, underlying projects are valued over £250,000 and under £100 million
r – Revised, p – Provisional. Percentage change is against the same period of previous year.
Source: Glenigan
Note on the statistics
The Glenigan Index of project starts provides a leading indicator of construction activity in the UK. It is based on data collected about every construction project which started on site during the previous three-month period. The Index covers civil engineering and non-residential projects over £250,000 and residential projects for 10 or more units. It excludes any project over £100 million.