Glenigan Index of construction starts to end of December 2024

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

• 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.