Uncertainty surrounding this week’s General Election has dragged construction activity to a two-year low, industry analyst Glenigan has warned
According to the latest data, the number of office scheme starting on site fell by 50 per cent compared with one year ago, while the retail and industrial sectors decreased by 32 per cent and 27 percent respectively.
Glenigan economics director Allan Wilén said the pace of expansion in the commercial sectors had clearly eased over the past six months, driven by a combination of a firming comparison base and an easing in investment across the economy during the second half of 2014.
‘The recent sharp decline is a break in this trend, and suggests a wholesale decision to “wait-and-see” by private sector clients and developers,’ he said.
‘We expect construction starts to spring back during the second half of the year, so long as a credible government is formed and the prospect of a second general election later in the year fades. This would mitigate the impact of the recent slowdown.
‘Continued improvements in planning approvals add weight to the view that this is a pause rather than a permanent shift in market conditions.’
More positively, the findings show the value of housing starts up 1 per cent, with a 4 per cent growth in private housing starts offset by a 6 per cent decline in social housing work.
The hotel and leisure sector, meanwhile, grew by 11 per cent in the three months to March.