Rise in retail, education and civils work provide bright spots for industry

• Starts in the three months to November were 11% down on a year ago.
• Residential starts were 17% lower, due to a sharp fall in private housing activity and fewer social housing projects.
• Non-residential project starts were 7% down on the same period in 2016
• Education project starts increased by 26% and retail projects were 46% higher than a year ago.
• Civil engineering starts were 4% lower than a year ago, but 22% higher than during the previous three months on as seasonally adjusted basis largely driven by a sharp rise in infrastructure work.

The value of work starting on site in the three months to November was 11% lower than during the same period a year ago, according to the latest Glenigan Index. On a seasonally adjusted basis, starts were 9% down on the three months to August 2017.

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “The latest Glenigan Index data suggest that that the flow of project starts may have begun to stabilise after the retrenchment seen since the summer. Although down on the preceding three months, the value of starts on a seasonally adjusted basis were slightly ahead of the three months to October as increased starts in the retail, education and civil engineering sectors have helped temper the impact of declines elsewhere.

“The decline in private residential projects starting on site since the summer has been a particular drag on overall starts, while office starts are also sharply down on a year ago.

“Private residential starts were 23% lower than during the previous three months on a seasonally adjusted basis and down by 19% on the same period last year. The decline is against a backdrop of weak household earnings and a cooling in property transactions in the wider housing market. Social housing starts have also slipped back in recent months, being 12% lower than a year ago.

“Overall non-residential projects were 17% lower than a year ago, but unchanged on a seasonally adjusted basis against the preceding three months. The year on year decline is attributable to a halving in office project starts and persistent weakness in public sector funded areas such as health and community & amenity projects. However, industrial projects starts were 13% up on a weak performance a year ago, while education starts increased 26% and retail starts were up 43% on a year ago.

”Civil engineering starts strengthened during the three months to November, boosted by both a sharp increase in infrastructure projects and an rise in utilities work. Starts were 22% higher than during the three months to August, although they were 4% down on a year ago.

The performance of different parts of the UK has diverged over the last three months. The value of project starts fell back sharply in the East of England, East Midlands, London and Wales and Northern Ireland. The value of project starts were little changed on a year ago in the North West and Scotland.  The South East, South West and North East all recorded double digit growth in project starts against the same period last year. 

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