Optimistic close to 2016 for Construction Industry

Author: ross sturley cimcig

The value of work starting on site in the three months to December was 2% higher than during the same period a year ago, according to the latest Glenigan Index. Whilst starts were also 14% lower than during the preceding months, this was due to the seasonal slowdown during December: On a seasonally adjusted basis starts were 4% higher than during the preceding quarter.

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “Overall projects starts were 2% lower during 2016 as a whole. However, the latest Glenigan Index data indicate a steadying in market conditions and investor confidence. The stabilisation in industrial and office project starts is especially encouraging: Earlier in the year both sectors saw project starts fall sharply as investors reviewed the implications of the Brexit vote for their projects’ viability.

Private residential starts during the three months to December were 6% ahead of a year ago, despite falling back against the previous quarter. Looking ahead the development pipeline remains positive, with the private residential approvals during the three months to December 10% up on a year ago. Encouragingly social housing starts have also strengthened, being 3% up on a year.

Civil engineering remains a drag on underlying project starts, being 19% down on a year ago.

The Glenigan Index data reveals that a regional shift in the industry’s workload is underway. Most parts of the southern and eastern England have seen flat or weakening project starts. The capital saw underlying starts during the three months to December decline by 20% against a year ago, while starts in the south west were down 23% and in the south east were just 2% ahead. In contrast the north east and north west of England, west midlands, and Northern Ireland have all experienced a strengthening in project starts, growing by 32%, 16%, 40% & 77% respectively.