Infrastructure – Overview

Project-starts fell against both the previous quarter and last year. However, main contract awards and detailed planning approvals advanced on the preceding three-month period and the previous year.

Adding up to £1,008 million, infrastructure work starting on-site during the first quarter of 2023 fell 58% compared with the preceding three months to stand 54% down on 2022 levels. Major (over £100 million in value) project-starts performed particularly poorly, falling 75% against the preceding three-month period and 59% compared with a year ago to total £408 million. Underlying (less than £100 million) project-starts totalled £600 million, a 43% fall compared with the preceding three months on a seasonally adjusted (SA) basis to stand 49% down on a year ago.

Totalling £2,892 million, infrastructure main contract awards grew 15% during the three months to March to stand 88% higher than 2021 levels. Growth against the previous year was due to major project contract awards which, at £2,035 million, quadrupled against the 2022 levels, but stood 1% down on the previous quarter. On the other hand, underlying contract awards grew 68% (SA) against the preceding three months but decreased 22% compared with a year ago to total £857 million.

At £10,776 million, infrastructure detailed planning approvals grew more than five times against the preceding three months to stand more than ten times higher compared with a year ago. Major project approvals increased six times against the preceding three months, with the value increasing more than 20 times compared with the previous year to total £10,275 million. Underlying approvals remained flat against the preceding three months (SA) but grew 5% compared with the previous year.

Infrastructure – Types of Projects Started

Rail projects accounted for 35% of infrastructure work starting on-site during the three months to March, with the value adding up to £358.5 million. Despite its dominance, the value of rail project-starts fell 26% compared with a year ago. Road project-starts added up to £288.2 million, accounting for 29% of work starting on-site during the period. Road projects suffered a 62% drop in work starting on-site compared with 2022 levels.

Other infrastructure project-starts accounted for 32% of the total value, with the value adding up to £319.7 million, despite a 66% decrease. Airports were the only segment that experienced growth, having increased more than tenfold to total 41.5% compared with last year’s levels.

Regional Analysis – Project-Starts

The East of England accounted for 26% of the total value of infrastructure project-starts during the first quarter of 2023 after experiencing quadruple growth compared with the previous year. Infrastructure construction-starts added up to £263 million and included the £158 million Beaulieu Park Railway Station (Project ID: 10034500). Scotland accounted for the second-greatest proportion (20%) of project-starts, having doubled compared with 2022 levels to total £203 million. This growth was mainly driven by the commencement of the £150 million Carstairs Junction rail upgrade works (Project ID: 23069946). The West Midlands was the only other region that experienced growth at 69%, bringing its value up to £80 million, an 8% share of the sector.

In contrast, project-starts in the South East fell 27% against 2022 to total £127 million, accounting for a 13% share of the sector. Totalling £96 million, London accounted for a tenth of all project-starts. The value of infrastructure projects commencing on-site in the Capital decreased 69% compared with a year ago. Accounting for 7% of the sector, project-starts in the South West were 2% down on last year’s levels to total £68 million. The North West also experienced a poor period with project-starts declining 79% on the preceding year to total £64 million.

Infrastructure Project-Starts during the Three Months to March 2023

Regional Analysis – Detailed Planning Approvals

Unlike project-starts, detailed planning approvals performed very strongly in the South East during the first quarter of 2023 having increased more than 55 times on the previous year to total £10,028 million. The region accounted for 93% of the total value during the period, however the growth was heavily inflated by the approval of the £10 billion Junction 1 of M2 to M25 Lower Thames Crossing (Project ID: 91161081). The North West also performed very strongly, with approvals increasing more than three times against the previous year to total £280 million. The North West accounted for 3% of the total value, with the approval of the £175 million aqueduct works in Lancashire (Project ID: 21054277) largely influencing growth.

The East of England also quadrupled in value compared with a year ago to total £230 million, accounting for a 2% share of the sector. Approvals in the South West jumped 77% against 2022 to total £91 million, which accounts for 1% of all infrastructure approvals during the period. All other regions accounted for an insignificant share of the sector.

Infrastructure Detailed Planning Approvals during the Three Months to March 2023

Forecast Construction-Starts for Infrastructure

Note: Underlying projects are schemes with a construction value of £250,000 to £100 million.  Forecast updated in April 2023 p – provisional, f – forecast.
 Source: Glenigan