Back
News

Construction starts drop by 17% over last three months

Construction starts have remained weak in the three months to March, but detailed planning approvals are showing slight year-on-year improvement, according to latest data.

Glenigan’s March Construction Review found that project-starts dropped 17% against the preceding three months’ performance, to stand 30% lower than a year ago.

Main contract awards were also sluggish, dipping 13% in the run-up to March and down 34% on 2023 figures.

However, detailed planning approvals registered a modest 5% increase compared to the previous year, despite falling back 24% against the preceding period.

Approvals were boosted by the £1,268m A12 Chelmsford to A120 junction improvement works in Essex.
Glenigan economic director Allan Wilen said: “Persistent adverse socioeconomic conditions continue to hold back significant spending in both the public and private sectors.

“However, a rise in underlying infrastructure starts during the last three months and a modest uptick in planning approvals compared to last year indicates the current situation may slightly ease during the second half of the year.”

Sector analysis

Overall residential starts on site fell during the three months to February, dropping 16% during the index period to stand 19% lower than a year ago.

Private housing was down 11% on the previous year, declining 17% against the preceding three months. Social housing also performed poorly, with work commencing on-site slipping back 31% during the three months to February and plummeting 30% against the previous year’s figures.

The value of starts fell across most non-residential sectors during the three months to February, with health the only sector to experience growth against both periods.

Offices and community and amenity were two of only three verticals to experience growth against the preceding three months, rising 18% and 21%, respectively. However, both failed to increase on the previous year.

Health starts enjoyed a strong period, increasing 24% against the preceding three months and finishing 19% above last year’s figures.

Civils work also increased against the preceding three months, up 19%. However, these figures failed to increase against the year before.

Civils growth was boosted by infrastructure activity, with starts increasing by nearly a third (31%) against the preceding three months but remaining down by a fifth (22%) on a year ago.

Utilities starts increased 3% against the preceding three-month period but were 18% down on the previous year.

Industrial performance was disappointing, sinking 38% during the three months to February to stand 48% lower than a year ago.

Retail lost ground as well, with the value of project-starts declining 22% against the preceding three months and 23% against the previous year.

Education was also on the decline, with the value of underlying project-starts slipping back 18% against the preceding three months to stand 39% down on 2023 levels.

Hotel & Leisure starts decreased 3% against the preceding three months but crashed on the year before, falling back 39% compared with 2023 figures.

Regional analysis

Regional performance was poor, with most of the UK experiencing a weakening in project-starts during the three months to February.

However, London offered a bright spot, with project-starts performing relatively well compared to the rest of the UK, increasing 22% against the preceding three months.

Despite this, starts failed to match 2023 levels, remaining 15% behind.

It was a similar story in the West Midlands, with the value of project-starts increasing 15% against the preceding three months but remaining 8% down on the previous year.

Scotland experienced a similar trend, advancing 2% against the preceding three months but falling back by a quarter (25%) on the year before.

Northern Ireland and the North East weakened against the preceding three months, falling back 4% and 31%, respectively. Both regions were down on the previous year, remaining 16% and 43% lower than a year ago.

Some areas of the UK fared even worse, including Wales where the value of project-starts fell 37% against the preceding three months to stand a whopping 57% down on a year ago.

This was also the case in Yorkshire and the Humber which crashed compared to the preceding three months and the previous year, down 18% and 37%, respectively.

Photo © Syaibatul Hamdi/Pixabay

Send feedback to Julia Cahill

Follow Estates Gazette

Up next…