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Construction starts plummet 24 per cent

The underlying value of UK construction starts for the past three months has dropped by nearly a quarter compared to this time last year

According to research by industry monitor Glenigan, there was a 24 per cent fall in the value of construction projects starting on site in the three month up to June with some sectors fairing worse than others.

Hotel construction in the capital feel 73 per cent compared to last year in what has been described as a temporary ‘lull’ by Glenigan economics director Allan Wilen

He said: ‘Last year saw a surge in hotel starts as clients pulled forward projects to ensure completion before the Olympics. The current lull is forecast to be temporary with the budget hotel chains expansion plans underpinning future growth.’

Residential meanwhile witnessed a 29 per cent year on year fall linked to both private and public sector cuts. Private housing project starts were down 31 per cent while social housing was down 26 per cent.

Wilen explained: ‘House builders continue to be reluctant to start new sites and are focused on completing existing developments as the housing market remains sluggish.

‘However the Government’s First buy programme will help to bridge the mortgage gap for first-time buyers and Glenigan forecasts that private house building will stabilise by the end of 2011. In contrast social housing will decline further as a result of continued public sector cuts.’

Retail was the only sector to buck the trend, witnessing a 13 per cent year on year increase as major supermarket chains press ahead with their expansion plans.


Wilen said: ‘The supermarkets continue to get good value for money from the construction industry as it competes fiercely for new work.’

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