Construction starts weaken during the third quarter

The value of work starting on site during the third quarter was 13% down on the previous three months on a seasonally adjusted basis and 10% lower than a year earlier, according to the latest Glenigan Index.

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “Revised data reveals a stronger performance in August than previously estimated. Nevertheless, projects starts during the three months to September were 10% down on year ago. Non-residential starts have fallen back sharply with sharp falls in both private and publicly funded areas. Civil engineering starts were also down on a year ago due to declines in infrastructure starts. Residential project starts have fallen back 7% over the last three months, but were 1% up on year ago.

“Private residential starts weakened during the three months to September. Private housing starts dropped 9% during the three months to September against the preceding three months on a seasonally adjusted basis and were 2% down on a year ago. Social housing starts slipped back by 1% against the previous three months, but were 14% up on a year ago. 

“Overall non-residential projects fell 16% against the preceding three months on a seasonally adjusted basis and were 20% lower than a year ago. Industrial and commercial sector starts have declined sharply over the last three months. Industrial, office and retail starts were 38%, 29% and 43% down respectively against a year ago. Government funded sectors were also lower than a year ago, with education and health down by 10% and 17% respectively.

Community & amenity was a bright spot, rising by 14% against a weak performance a year ago. 
“Civil engineering starts fell by 26% against the three months to June on a seasonally adjusted basis and were 10% lower than a year ago. The year-on-year decline in project starts was prompted by an 18% drop in infrastructure projects, while utilities project starts were 24% higher than a year ago.”

Northern Ireland and Yorkshire & the Humber were the best performing parts of the UK during the third quarter, with starts rising by 41% and 13% respectively on a year ago. The East of England, East Midlands and Scotland all saw a 5% rise in starts. The value of underlying projects starts fell in all other parts of the UK. London, North East, North West, South West and West Midlands saw double digit declines of 11%, 34%, 16%, 31%, and 25% respectively.