Latest bulletin from Glenigan paints a gloomy picture overall but the rise in house-building appears to be one bright spot. However, it is still well down on where we were a year ago, before that now-notorious Truss-Kwarteng intervention.
Residential construction starts rose by a fifth (+21%) during the three months to the end of July but remained 26% lower than a year ago.
Private housing, in particular, enjoyed a growth spurt, with starts increasing 40% during the period. However, this was still 26% down on 2022 levels.
Social housing was 25% down on the preceding three months and 21% down on the year.
Non-residential construction project-starts fell by 23% against the preceding three months to stand 38% down on a year ago. Offices and Industrial project-starts experienced a particularly poor period, both tumbling 50% and 51% compared 2022 levels, respectively and also falling 35% and 24% against the previous three months.
Civil engineering work starting on-site declined 25% against the preceding three months, 46% down against the previous year, according to Glenigan’s reckonings.
Economic director Allan Wilen said: “The disappointment continues as the market remains depressed, and given the unusual economic circumstances, this is hardly surprising. Uncertainty has stalled activity and many investors, public and private, are reluctant to commit to new projects. Furthermore, 12 to 18 months out from a general election, it’s likely the incumbent government will adopt a more cautious approach, particularly to big infrastructure, in the lead-up. This will further slow activity in the short term.
“On the other hand, it was encouraging to see that private residential construction continues to rally, suggesting developers are altering their plans after a drop in starts during [the first half of] 2023.”
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