A survey in January of construction buyers showed that construction had began to recover, this was used by the Government as a sign of broader economic recovery. Buyers may be seeing an improvement after the dreadful weather in December but Glenigans has reported that this improvement is not seen on site with every sector and region seeing a fall of some kind that that of a year ago.
Even taking into account the bitter weather we suffered Glenigan’s three-month trend figures make dismal reading. Construction projects that started in November to January fell by 28% compared to the same period a year ago.
Yorkshire and Humberside had the largest regional fall regarding value of new work starting on site was almost 50% less than that of a year ago. Scotland, Northern Ireland and the North West of England were all down a third, while the East of England got off lightly with a marginal 3% fall.
James Abraham, Glenigan economist, said:”The fall in project starts is largely due to the severe December weather. However, while the industry has made up some of the lost ground over the last month, January starts were still much weaker than a year ago.”
Residential projects plunged 39%, with private housing crashing by 47% and social housing down 27%.
“Whilst house builders deferred project starts in recent months in response to poor weather and weak consumer confidence, Glenigan expect private housing developments to return to growth by the end of 2011. In contrast social housing will remain subdued due to Government cuts” said Abraham.
Non-residential project starts also suffered being down by almost 25%.
“Retail construction starts halved, having been an industry bright spot throughout 2010.”
“Hotel and leisure construction starts fell by a third in the three months to January after defying the harsh December weather to register growth in Q4 of 2010,” said Abraham.
There was good news as Glenigan forecasts that non-residential construction will grow over the second half of the year as falling vacancy rates and increasing rental values lift office and industrial construction, offsetting a weakening in government funded areas such as health and education.
Civil engineering project starts were 22 % down compared to a year ago with utilities projects starts now declining faster than infrastructure. Although this is likely to be a short lived hiatus as regulated utilities and energy projects gain momentum.
Recipro sourced this article from Construction Enquirer.