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Construction starts tumble 7% in 2013

Construction project starts plummeted seven per cent in the three months to April compared to the same period last year

Fresh data from industry monitor Glenigan showed the number of projects coming out of the ground fell every month this year – although some sectors saw improvements in April.

Declines in retail, health and other public sector starts were however softened by gains in infrastructure and utilities starts, with rail, road and renewable energy projects also showing improvement.

The industrial sector saw a dire performance with underlying starts 42 per cent lower than the first quarter of 2012.

Northern Ireland and Wales saw the steepest declines in underlying starts, both down by 30 per cent in the three months to April.

Yorkshire and the Humber was meanwhile the best performing region, with underlying starts increasing by 15 per cent.

Last month’s underlying starts were up 9 per cent in the infrastructure sector and 17 per cent in the utilities sector compared to April 2012. Education starts also up 15 per cent compared to April 2012.

Housing was however down seven per cent compared to one year ago.

Glenigan Economist Andrew Whiffin said: ‘While the overall index declined in April there was a marked improvement in project starts for some sectors.

‘Gains in infrastructure starts were driven by road and rail projects in London and the South East, and renewable energy projects pushed up starts in the utilities sector, with wind farms in Scotland and Wales providing the largest boost.’

‘The gains seen in the civils and other sectors this month are encouraging signs, especially in light of the poor project starts during the first quarter and official data showing industry output fell 6 per cent compared to the first quarter of last year.’

On residential, he added: ‘The housing slowdown is likely in reaction to recent lending data that shows levels of mortgage approvals in the first quarter of the year are failing to surpass levels seen in 2012, despite continued government support for home buyers.’

The reports comes after official figures showed the UK construction sector shrunk 2.5 per cent this year following a brief hiatus at the end of 2012 preceded by five consecutive months of decline.

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