The latest publication from Glenigan shows continued struggles for the sector, but infrastructure is keeping the sector from dropping further
The October Glenigan Construction Index shows that the value of underlying work starting on-site in the last three months fell by 2%, to 18% below last year’s level.
Meanwhile, residential construction starts fell by 8% against the preceding three months, and by 33% year-on-year.
Still waiting for the “Burnham Bounce”
Particularly when it comes to project starts, the industry is still waiting with bated breath for the boost from the fresh prime minister’s policies, known as the “Burnham Bounce.” Overall activity from the preceding three months has dropped by 2%, and year-on-year has dropped 18%.
This is due to market conditions, borrowing costs, and continued promises of “fiscal discipline” from the treasury, ensuring that confidence in the construction industry remains relatively low.
On 28 October, the Autumn Budget is due to be delivered, as always promising potential relief for the industry, but the lead up is causing discomfort in the industry as it prepares for either beneficial or detrimental announcements.
Commenting on the Index, Glenigan’s Allan Willen said: “A welcome surge in civil engineering projects partially offset a decline in residential and non-residential project starts during the last three months. Whilst private housing starts stabilised against the previous three months, they remained sharply down on a year earlier.
“Looking ahead, the new first-time buyer scheme announced by the Prime Minister will hopefully help to rebuild market confidence and support a recovery in private housebuilding over the coming months. A Budget that gives developers certainty could get stalled schemes moving.”
Sector breakdown
In residential, the mood is lifted slightly by Burnham’s promise of “the biggest council housebuilding programme since the post-war era”, led by Angela Rayner, but aside from the £39bn Social and Affordable Homes Programme, this has yet to see any action that makes a difference in the numbers.
In non-residential, projects fell 15% quarter-on-quarter, and by 16% year-on-year, with industrial being a somewhat more productive sector than the rest, with activity growing 20% in the quarter, but still dropping 9% year-on-year.
The Public Sector saw health as its key performer, rising 11% year-on-year, but still dropping 2% quarter-on-quarter. Community & Amenity dropped 5% quarter-on-quarter and 29% year-on-year, while Education saw the biggest hit at 41% quarter-on-quarter, and 27% year-on-year.
Civil Engineering easily took the top spot with a growth of starts on-site of 101% quarter-on-quarter, and 43% year-on-year. Infrastructure helped with this massively, seeing a growth of 130% quarter-on-quarter, and 43% year-on-year. Utilities had a strong spell with a 73% growth quarter-on-quarter, and 43% year-on-year.
Access to the full index can be found on the Glenigan website.
