Resi construction starts drop by 27%

Construction starts in the residential sector have declined by 27% over the last year, according to the latest figures from Glenigan. The company’s April Index paints a gloomy picture, in line with the persistent decline across the construction sector. It found that residential construction starts in the last three months also fell by 27%. Glenigan said ongoing pressure on household budgets and economic uncertainty continue to negatively affect consumer confidence. The consequent unease among investors has led to significant delays in project starts across the UK. The performance of social housing was particularly weak, with starts down 43% against the preceding three months and 40% on the previous year. Private housing also dropped back, falling 22% against the previous three-month period and 24% on 2023 levels. Non-residential sectors Community and amenity project starts experienced an impressive growth period, increasing by 36% against the previous three months to stand 19% up on a year ago. A boost to the vertical was partially delivered by a £79m prison expansion project in Shaftesbury, Dorset. It was the only vertical to experience growth against both periods. Retail starts fell 13% during Q1. However, there was a modest value increase of 1% against the previous year. Utility starts decreased 21% against the preceding three months but also saw a modest increase against 2023, up by 2%. Similarly, health starts experienced a fall of 13% against the preceding three months, but advanced 26% on the same period last year. In contrast, education experienced a mixed period, up 3% compared with the last quarter but down 17% on a year ago. Industrial starts remained lower than 2023 levels, decreasing 22%, and falling 15% during the three months to the end of March. Civil works fared particularly poorly, with the value of starts declining 34% against the preceding three months, to stand 26% lower than a year ago. A significant driver for the decline was poor performance in infrastructure, which remained 42% behind 2023 levels, with work starting on-site also slipping back 43% against the last quarter. Regional analysis Northern Ireland was the strongest-performing region in the UK, with project starts increasing 44% against the preceding quarter, to stand 28% up on this time last year. Here, growth was accelerated by the £44m development of the Hamilton Dock Hotel in Belfast. The outlook for the east of England was also optimistic. It was the only other region to experience growth against both periods, up 13% on the preceding three months, as well as 25% on the previous year. Growth in the region was helped by the £74m commencement of a 246-home development in Maldon, Essex. London experienced a 23% decrease against the preceding three months and remained 18% down against the previous year. The West Midlands experienced particularly poor performance, with the value of project starts falling 56% against the preceding three months and by 45% compared with the same period last year. This was the steepest decline of any region. Work starting on site in the East Midlands fell by 49%, in Wales by 33%, and in Scotland by 25% all of which remained distinctly behind 2023 figures. Image © Anthony Harvey/Shutterstock