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Approvals up but construction starts stall

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The construction sector has failed to post overall year-on-year growth during the first quarter of 2015, according to the latest data from analyst Glenigan

The industry tracker said the value of residential starts was unchanged on 2014 levels, while non-residential starts were down 1 per cent.

However, its April index said education and schools work was emerging as the ‘brightest sector’, rising 18 percent year-on-year, helping to limit the effects of contracting commercial and industrial work.

Glenigan also said there had been a ‘renewed surge’ in projects receiving detailed planning permission during the first two months of 2015, with approvals up by 36 per cent compared to a year earlier.

Economics director Allan Wilén said a combination of uncertainty ahead of the 7 May general election and the effects of high levels of growth in the first three months of 2014 were likely to be responsible for the ‘flat’ first-quarter figures.

‘The overhang of last year’s relatively muted rise in approvals, coupled with some private-sector clients potentially pursuing a ‘wait-and-see’ approach during the run up to the general election, may keep starts subdued into the second quarter,’ he said.

‘However this replenishing bank of prospective projects with detailed permissions bodes well for growth during the second half of this year, especially if a credible government emerges quickly from the aftermath of the election.’

Regionally, the figures revealed an east-west split across England, with ‘marked rises’ relative to 2014 in the North East, Yorkshire and the Humber, the East Midlands, and the South East, contrasting with drops in the South West, the West Midlands, the North West and London.

Glenigan Construction Index

Glenigan April 2015 Construction Index

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