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Glenigan reports that the value of work starting on site across the UK during the three months September-November 2021 fell 13% against the preceding three months to stand 20% lower than the previous year.
Glenigan data is seasonally adjusted and includes all projects up to a value of £100m. In considers that projects bigger than £100m tend to have a distorting effect on the general picture of the industry’s health.
The value of residential work on site fell 15% against the preceding three months and by 34% against the same period in 2020.
Other sectors also saw sharp falls year-on-year during the three months to November: with civils down 31%, infrastructure down 36% and health down 40%.
However, office project starts were up 14% on the previous year and industrial project starts were 22% higher on 2020 (and 11% up on the summer month).
According to Glenigan, this downturn will be short-lived and start figures will “surge” in the New Year, assuming supply chain issues can be overcome. Recent planning approvals and contract awards suggest a strong pipeline of upcoming work to help the construction industry back to pre-pandemic levels of output.
Glenigan senior economist, Rhys Gadsby said: “Following a relatively stable third quarter for starts on projects under £100m, the first two months of Q4 have fallen sharply, especially in November where starts were at their lowest level since May 2020.
“Anecdotal evidence suggests that some builders are delaying starting new projects due to the schedules of existing projects, already on-site, being severely disrupted by material and labour issues. These issues are likely to hold back project-starts in the near term, however, with main contract awards and detailed planning approvals strengthening, and as material and logistical constraints ease, it is expected that project-starts will start to lift during 2022.”
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