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Construction growth up but housing starts down

Construction growth has continued throughout the start of the year despite the disruption caused by the flooding

According to industry analysts Glenigan, construction growth in February was up 10 per cent despite the economic disruption caused by the bad weather.

The growth was mainly spurred on by the rapid expansion in the office sector – projects starts were up by more than 50 per cent compared to last year – and by infrastructure, which saw starts up 64 per cent on last year.

The hotel and leisure sector also saw a return to growth, with starts up by more than 20 per cent.

But those projects reliant on public money saw declining figures. Starts of health projects fell by 43 per cent compared to a year ago, following a 10 per cent fall during 2013 as a whole. While education projects also slowed, despite growth during 2013.

Residential work also saw a decline, dropping two per cent overall, with private housing growth slowing to five per cent. The number of social housing projects starting also dropped by 15 per cent as flooding stopped projects from getting off the ground.

During the New Year the UK saw the wettest January in 250 years causing widespread flooding and disruption. This is said to have had a negative impact on the economy due to business closures and disruption across transport networks, causing delays to site openings.

However, the floods are expected to cause a rise in construction work later in the year when repair work is undertaken.

Commenting on the figures, Allan Wilén, economics director at Glenigan, said: ‘Private sector investment is the main driver behind the latest 10 per cent rise in construction project starts. Glenigan has recorded growth in the commercial and industrial property sectors that will feed through as higher industry workload during 2014 and 2015. Civil engineering also remains a hot spot, due to increases in infrastructure and utilities work.’

He added: ‘In contrast, the strong growth in housing project starts seen during 2013 lost momentum over the three months to February. The extreme weather conditions experienced over the winter months appears to have hampered the opening of some new sites and we anticipate a rebound in project starts during the spring as conditions improve.

‘Longer term recent events will generate additional repair work to flooded homes and business premises as well increased investment in flood defences.’

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