Subdued start to the New Year

• Starts in the three months to January were 14% down on a year ago.
• Residential starts were 7% lower, due to a marked decline in social housing projects which overshadowed a rise in private housing.
• Non-residential project starts were 20% lower than during the three months to January 2017 as a declines in commercial and public sector projects outweighed increases in industrial work.
• Civil engineering was 16% lower than a year ago.

The value of work starting on site in the three months to January was 14% down on the same period a year earlier, according to the latest Glenigan Index. On a seasonally adjusted basis, starts were 5% lower than during the three months to October.

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “The January Index reveals a renewed weakening in project starts. The value of underlying starts in the three months to January was 14% lower than a year earlier and on a seasonally adjusted basis was 5% down against the preceding three months. The decline was led by falls in commercial, civil engineering and public sector work which overshadowed a strengthening in private housing and industrial work. 

“Encouragingly, an improvement in the private housing sector during the closing months of last year continued during January. Private residential starts were 9% higher than during the same period a year ago. In contrast the smaller social housing sector has continued to fall away, being down by a third against August to October on a seasonally adjusted basis and 40% lower than a year ago.

“Overall non-residential projects were 20% lower than a year ago, but 7% up against the three months to October on a seasonally adjusted basis. The year on year decline is due 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 21% higher than a year ago.

“Civil engineering starts were 16% down on a year ago. Starts were dragged lower by the continued weakness of utilities work and a drop infrastructure starts which fell back after their strong performance during the second half of last year.

There has been a sharp divergence in the value of underlying construction starts across the UK. Scotland saw the sharpest rise during the three months to January 2017, with starts 47% higher than a year earlier. There was also firm year on year growth in the South East, South West and North East of England and in Yorkshire and the Humber, with increases of 4%, 34%, 17% and 20% respectively.  In contrast the value of project starts fell back sharply in the East of England, London, Wales and Northern Ireland.

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

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