The construction industry has returned to growth after six months of market contraction, new research from Glenigan reveals
According to the analyst, figures for the three months to the end of October showed the value of new project starts was higher than it had been for the same period a year earlier – the first time this has happened since March this year.
Glenigan said the latest quarterly index figures showed growth up 6 per cent up year-on-year, with housing, civil engineering and non-residential schemes all in positive territory.
The fastest rise was in residential building, which saw the value of starts increase 9 per cent on a year earlier. Activity in the sector was boosted by the social-housing sub category, which grew by 19 per cent - its strongest expansion since the start of 2014.
Non-residential starts as a whole were up 4 per cent on a year earlier, with industrial, office, retail and hotel and leisure projects all registering growth. However, those gains were tempered by a 7 per cent decline in education starts and a “plummet” in the value of new health projects.
Glenigan economics director Allan Wilén said the last three months had seen the commercial and industrial sectors finally shake off ‘the worries of earlier this year’, which included a protracted spell of uncertainty over the outcome of May’s General Election. He added that the capital was not at the forefront of construction growth.
‘London has seen consistently weak levels of both project starts and planning approvals during 2015, after the rapid rates of expansion recorded during 2013 and 2014,’ he said.
‘As such, it is the English regions outside of the capital that are leading growth, with the Midlands a particular hot spot.’
The West Midlands saw starts up 37 per cent on a year earlier while the East Midlands was up by 28 per cent during the three months to October. The North West saw a 27 per cent rise in starts, with more modest growth being recorded across the North East, Yorkshire and Humber and the South East. London, Wales and Scotland last saw overall construction-sector growth in March.
The Glenigan Index is a monthly barometer of the value of construction activity starting on-site during the previous three months. It tracks projects valued between £250,000 and £100m and residential developments of 10 or more units.