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Construction growth slows

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Construction growth has slowed in the three months up to July, according to industry analysts Glenigan

Non-residential projects have dropped off significantly in the last month – down by 14 per cent. This decline is mainly down to a fall in the value of retail starts which has been roughly flat throughout the last 18 months.

The northern regions have been worse hit by the decline in construction growth – projects starts in the North West, Yorkshire and the Humber have all dropped most significantly.

However, the picture is rosier for Scotland which has continued to see construction growth. Despite the political and economic uncertainty surrounding the fast approaching independence referendum, the value of construction starts in the country was up by 15 per cent in the last three months.

‘The North West, North East and Yorkshire and the Humber entered 2014 as the three English regions furthest from their 2007 peaks in terms of the underlying value of project starts,’ Allan Wilén, economics director at Glenigan, said.

‘Further growth through the year should see the North East catch up with its regional neighbours, though we also expect a return to expansion across the rest of Northern England.’

Despite this slowing off, the number of projects starting on site across the UK from April to June is still 11 per cent higher than a year ago.

Construction output continues to be fuelled by housing - which is up by 10 per cent - however, growth in residential projects has been overtaken by infrastructure which has increased by 17 per cent.

Wilén, added: ‘The continued flow of new private housing developments starting on site is positive and follows a strengthening in planning approvals that suggest that government planning reforms are improving the supply of sites for development.

‘However, the boost to overall output from social housing work may wane. Project starts are currently undergoing a period of stabilisation, having fallen back by one per cent over both the last three and six month periods.’

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