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22nd October 2012
In a worrying sign that construction activity is set for further a slowdown in the final quarter of the year data collected by Glenigan show that the value of projects placed on hold increased by 26% in September. The value of underlying projects on hold increased to £729m from £578m in August. Unfortunately the data add weight to signs in other Glenigan data (on project starts and planning approvals) that have hinted to a slowdown across a number of sectors of the industry.
The private housing sector accounted for the largest proportion of projects on hold, the value of such projects jumped from £126m in August to £265m in September, or 22% of projects on hold to 36% of projects on hold. The large jump comes as a surprise as private housing is seen by us as one of the more promising sectors in terms of project starts and planning approvals. But if projects in the sector continue to be placed on hold at the rate seen in September the relatively positive outlook for the sector will need revising.
More in line with our starts and planning data, the office and commercial sector also saw a hefty increase in the value of projects placed on hold in September, up to £154m from £28m in August, this ties in with the slowdown in project starts for the sector seen in Septembers Glenigan index. The education and health sectors also saw considerable rises in the value of projects placed on hold, from £16m to £59m and £13m to £40m respectively.
Regionally London saw the largest increase in the value of projects on hold, up to £158m from £82m in August, £60m of this for one office project placed and the majority of the rest for projects in the private housing sector. Declining values of projects on hold were recorded in the South East, North West and East Midlands.
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