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Construction starts edge higher during last quarter of 2024 but fall short on last year’s performance
Residential and hospitality sectors lead construction start gains in final quarter
- Underlying project-starts experienced a slight upturn during the final quarter of 2024, increasing 2% on the preceding three months
- The value of work starting on-site fell 3% compared to last year
- Residential construction starts increased 7% on the preceding three months but dropped 3% on 2023 figures
- Non-residential project-starts increased 3% during Q.4 2024, up 1% on 2023 figures
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Civil engineering work starting on-site were down 29% compared with the preceding three-month period, and 20% down against the previous year
The December Index shows that the value of project-starts declined during the final three months of the year it actually rose 2% compared to Q.3, when seasonally adjusted.
Encouragingly, some verticals also rallied, especially private residential construction, which contributed to 7% overall residential sector increase in Q.4. In the non-residential sector, continued strong performance in Hotel & Leisure and a handful of other verticals were integral to overall growth of 3%.
Commenting on the outlook at the start of the year, Glenigan’s Economic Director, Allan Wilen, says, “As expected, seasonal factors affected work commencing on-site during the final quarter of the year. However, after adjusting for the Christmas wind-down, starts managed to edge slightly higher during these three months. This was partly driven by a 9% rise in private housing projects, indicating that developers may be entering the New Year with renewed confidence.
“Declines in civil engineering and infrastructure starts, which weakened in Q.4, indicate a degree of uncertainty persists regarding public sector funding. The Government’s Spring Spending Review is hotly anticipated, and many are waiting on updates for a number of major projects name-checked in the Autumn Budget Statement, as part of a wider package promised to kick-start construction activity.”
Sector Analysis – Residential
Residential construction starts increased 7% during Q.4 2024 but stood 3% lower than a year ago.
Private housing increased 9% against the preceding three months, starts were also 1% above 2023 levels.
Social housing performed poorly on both counts, with work starting on-site falling 1% against the preceding quarter, standing 17% down on the previous year.
Sector Analysis – Non-Residential
Non-residential vertical performance was mixed, despite posting overall growth against both periods.
Hotel & leisure continued rise, increasing 2% against the preceding three months to stand 30% up on the previous year.
Education project-starts also experienced a strong period, increasing 12% during Q.4 2024 to stand 22% higher than a year ago.
Industrial sector starts also had a positive Q.4, growing 8% against the preceding three months, and 30% against the previous year.
Office project-start performance was mixed, increasing 14% during Q.4 2024, yet finishing 28% lower than a year ago.
Performance was poor across all other verticals, with community & amenity project-starts plummeting 23% against the preceding three months. Starts also tumbled 19% compared to the previous year.
Civils performance slumped by 29% in Q.4 2024, to sit 20% lower than a year ago. This can predominantly be attributed to a crash in utilities starts, which fell 50% against the preceding three months and 45% against the preceding three months. Infrastructure work decreased 10% against the preceding quarter but grew 5% compared with the previous year.
Regional Analysis
Regional performance was also mixed. The North East stood out, with project-starts increasing 88% during Q.4 to finish 5% up against the previous year.
The South East also experienced relatively strong growth, increasing by 11% against the preceding three months to finish 46% above 2023 levels.
The North West and Yorkshire both performed well against the previous quarter, with the value of starts increasing 27% and 11% during Q.4 2024. However, performance in both regions declined 5% against the previous year.
London experienced poor performance, with the value of starts decreasing 13% against the preceding three months and remaining 35% down against last year.
Glenigan Index | Residential | Non-Residential | Civil Engineering | |||||
Month | Index | % change y-o-y | Index | % change y-o-y | Index | % change y-o-y | Index | % change y-o-y |
Dec-23 | 149.8 | 7% | 217.1 | 10% | 106.4 | 0% | 130.7 | 13% |
Jan-24 | 176.2 | 3% | 242.3 | 1% | 132.6 | 1% | 161.2 | 26% |
Feb-24 | 172.5 | 3% | 235.4 | 0% | 131.7 | 5% | 155.5 | 13% |
Mar-24 | 197.8 | 2% | 258.3 | -6% | 159.6 | 15% | 176.5 | 2% |
Apr-24 | 182.2 | 12% | 240.3 | 1% | 143.3 | 25% | 171.1 | 29% |
May-24 | 192.4 | 16% | 254.5 | 4% | 141.7 | 25% | 220.3 | 45% |
Jun-24 | 186.9 | 8% | 256.0 | -2% | 126.9 | 7% | 233.6 | 70% |
Jul-24 | 183.8 | -1% | 261.4 | -6% | 119.9 | -7% | 221.1 | 49% |
Aug-24 | 173.9 | -11% | 242.3 | -16% | 125.1 | -13% | 174.6 | 24% |
Sep-24 | 179.4 | -5% | 251.8 | -6% | 128.5 | -8% | 176.8 | 13% |
Oct-24 | 174.3 | -3% | 235.3 | -7% | 131.3 | 2% | 172.5 | 4% |
Nov-24 | 170.8 | 1% | 234.3 | -4% | 128.3 | 8% | 159.1 | 1% |
Dec-24 | 145.0 | -3% | 211.3 | -3% | 107.1 | 1% | 104.9 | -20% |
Economics Director
T: 01202 786760
E: allan.wilen@glenigan.com
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