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Construction starts drop for third month in a row

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The value of construction starts suffered a third significant fall in consecutive months during October, according to new data

The month’s Glenigan Index shows a 19 per cent drop in the value of starts on projects worth up to £100 million across all sectors, compared to the same month last year.

This follows falls of 12 per cent and 10 per cent in September and August respectively, with smaller drops in the previous five months. The only year-on-year monthly rise in the past year came in February, which saw a 3 per cent rise.

Glenigan’s economics director Allan Wilén said: ‘The level of starts has been adversely affected by the continued weakness of public-sector projects, a sharp drop of office projects and a recent faltering in industrial sector activity.’

Wilén also voiced worries about the fall in the value of starts in the housing sector, which had posted healthy rises each month between February and July.

Following drops of 1 per cent in August and 14 per cent in September, the value of new housing projects fell by 19 per cent in October.

‘The marked decline in private housing projects starting on site since the summer is a concern,’ he said. ‘The sector had been a recent area of support for overall construction starts.

‘Social housing starts have also slipped back in recent months, being 14 per cent lower than a year ago.’

Non-residential projects were 18 per cent lower than a year ago, which Wilén attributed to a halving in office starts and ‘persistent weakness in public-sector funded areas such as health and education’.

Industrial projects have also faltered over the past three months, down a third on the May to July period.

One of the only positive indications amid the gloom came in the hotel and leisure sector, which was up 10 per cent on a year ago.

Civil engineering is also showing some signs of life, thanks to an increase in infrastructure work. Although starts in this sector were down 18 per cent on last October, they were up 23 per cent in the three months to October, compared with May to July.

Northern Ireland suffered the sharpest decline in overall starts – down 62 per cent on a year ago, a fall attributed to the current political gridlock, which is delaying publicly funded projects.

The north-west of England saw the smallest (7 per cent) decline in the value of project starts compared to a year ago.

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