Glenigan: Housing market slumps
The housing market has suffered a dramatic slump since this time last year, according to construction industry tracker Glenigan
A 61 per cent fall in the value of private housing starts was recorded by the construction industry analyst in the first quarter of 2011.
Overall, the Glenigan Index for March fell by 31 per cent compared to a year ago.
James Abraham, economist at Glenigan, said: ‘The weak first quarter of 2011 is in sharp contrast to the strong rebound experienced a year ago in the run-up to the general election.
‘The construction industry has been hit by reduced government investment and continued private sector weakness, with private housing experiencing the biggest contraction.’
While private housing performed poorly, commercial projects have also suffered. Glenigan’s non-residential index fell by 19 per cent. The underlying value of office starts fell by 45 per cent, while retail starts were 27 per cent down.
Abraham said: ‘This reflects private sector nervousness over low economic growth, high inflation and poor retail sales.’
The underlying value of civil engineering project starts fell year on year by 16%. However, Abraham said the sector has shown a slight improvement on recent months.
He said: ‘While civil engineering work is still below the first quarter of 2010, there has been a significant recovery compared to three months ago.