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Fri May 20 2022

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Upturn in planning consents boosts construction pipeline

26 Jan Projects starts fell in the fourth quarter of 2021, according to data-gatherer Glenigan, but planning permissions rose.

According to the latest Glenigan report, analysis the three months to the end of December 2021, the value of Q4 project starts fell by 39% on Q3 but detailed planning consents rose by 26% and main contract awards were up 13%, indicating a solid pipeline of work for the first half of 2022.

Construction volume output rose 3.5%, reversing October’s 1.7% decline. This upturn brings monthly output back to pre-pandemic levels, suggesting supply chain issues, which has hindered construction activity throughout most of 2021, have eased, Glenigan said.

Major planning approvals (for projects worth more than £100m) also rose by 46% during the fourth quarter, but were down 41% on Q4 2020. Underlying planning approvals (projects under £100m) grew 7% on the previous quarter and by 8% on Q4 2020.

The value of main contract awards increased in 2021 Q4 by 4%, compared to Q3, and by 7% on the year.  higher on 12 months ago. It’s worth noting that awards for projects under £100 million also edged up 5% on last year’s figures, but were 11% down on Q3 in 2021.

 Although overall project starts dropped 39% between Q3 and Q4 2021, the industrial sector held firm. Industrial starts under £100m in value maintained their level in Q4 (down just 1% on Q3 in value) and were up 37% against the fourth quarter of 2020.

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Infrastructure starts increased 15% against Q3, but were still 25% lower than a year before.

Glenigan economic director Allan Wilen said: “Considering the challenges that have been thrown at the construction industry throughout the year, it has been able to weather the storm and show its resilience. The rise in construction output, planning consents and approvals are welcome news and paint an optimistic picture for the future after a very difficult end to the year. Signs that supply chain issues are easing off supported by a strong development pipeline, indicates the industry is in a strong position as 2022 dawns.”

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