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Private sector work on the up

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The UK’s private sector construction sector is showing signs of life, but is being held back by stagnation in the public sector market, according to new figures

The September index by research firm Glenigan shows that the office, hotel and leisure and industrial sectors have all returned to growth in the past three months.

And although the underlying value of construction starts was 8 per cent lower during the three months to August than the same three months last year, this was an improvement on a 20 per cent decline measured in July.

Allan Wilén, Glenigan’s economics director, said: ‘The uncertain and hard to call election continued to cast a shadow over the construction industry for much of the summer.’

‘However the latest Glenigan starts data shows the commercial and private housing sectors coming back to life, and we expect a similarly strong September to drag starts overall back into growth for the third quarter.’

But he said that a scarcity of public sector projects is ‘continuing to weighing on new activity’, leaving non-residential starts 9 per cent down on a year earlier during the three months to August.

The value of education, health and other community schemes was down on a year earlier, he added.

A growth in private residential projects of 11 per cent was more than offset by a downward trend in social housing starts, which meant the overall residential growth index was down 2 per cent.

The East of England and East Midlands were the best performers in overall starts, with the West Midlands and North East also experiencing growth since a year ago.

However, ever other part of the UK saw overall declines with drops of more than a quarter in Scotland, Wales and Yorkshire and the Humber.

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