Glenigan survey reveals mixed fortunes for industry
The number of projects put on hold has fallen for the third month in a row according to the latest figures released by Glenigan
Only 144 schemes were shelved last month - a huge drop in numbers compared to the 939 projects which were mothballed in January 2009 alone (see attached spreadsheet).
Glenigan analyst James Abraham said: ‘In 2009 there was a large volume of residential and office projects shelved as the economy struggled to deal with the aftermath of the credit crunch.
‘Over 2010, developers have returned to many of these projects as market conditions improved and the value of projects being placed on hold has ended some 64 per cent below the level of 2009.’
However, at the same time, the industry tacker has also shown a worrying fall in developments actually starting on site. According to the Glenigan Index the amount of building work in the UK fell by almost a third (29 per cent) in the last quarter of 2010, compared with the same three months of the previous year.
Residential starts were down 31 per cent, non-residential starts were down 20 per cent and civil engineering was down 50 per cent, compared with the last quarter of 2009.
Abraham added: “’Extreme weather conditions exacerbated the seasonal lull combined with the slowdown in government investment resulted in one of the lowest monthly total project starts in years.’
The prospects for 2011 are not much better, warns Abraham. Compared with last year, seven per cent fewer construction projects will be started, although their total value will be six per cent higher.
In what is a reflection of the Government’s public spending cuts, Glenigan predicts growth in the private sector, such as housing, industrial, office, retail and civil engineering. The number of social housing, hotel and leisure, education, health, and community and amenity starts are forecast to decline.
Glenigan economics director Allen Wilen said: ‘The impact of planned government investment cuts is clear, with only rail avoiding the axe and increasing private sector confidence not quite strong enough to counter government cuts.”
Office developments will be up 41 per cent on 2010, thanks to rising demand, capital and rents, particularly in central London, the Glenigan concluded.