Glenigan Index of construction starts to end of November 2024

Non-residential growth balances construction slowdown

Hotel, leisure, and education projects are driving gains despite faltering residential and civils work

• The value of underlying starts was flat against both the preceding three months and the previous year
• Residential construction-starts declined 1% during the index period and fell back 6% on 2023 figures
• Non-residential project-starts grew by 9% against the three months to the end of November, finishing a tenth higher than a year ago
• Civils work starting on-site dropped 17% against the preceding three months and was flat against the previous year

The December Index shows construction activity avoiding a slide back into decline, with project-starts holding steady in the three months to the end of November. This gradual rebound reflects the findings of Glenigan’s autumn Forecast, which registered a modest performance dip in 2024 before a return to double-digit growth next year.

Commenting on the findings, Glenigan’s Economic Director, Allan Wilen says, “The much-anticipated boost from a switch in Government in July has yet to fully materialise, leaving many in the industry still waiting for a turnaround. While a weak period for residential construction starts weighed on overall performance, strong growth in the non-residential sector, fuelled by improved confidence, helped to stabilise starts. Notably, the Education and Hotel & Leisure sectors delivered standout performances, serving as key drivers of overall construction project starts.

“Despite current, sluggish conditions, our data forecasts a return to growth from 2025, offering the industry brighter horizons and renewed optimism as the new year approaches.”

Taking a closer look at the sector verticals and UK regions…

Sector Analysis – Residential

The overall value of residential project-starts weakened during the Index period, falling 1% against the preceding quarter. The value also stood 6% lower than the previous year.

Private housing stumbled on its strong performance in recent iterations of the Index, with work starting on-site declining 3% compared to the preceding three months, and 1% on 2023 levels.

Social housing starts bucked the trend, increasing 4% on the preceding three-month period. However, it performed poorly compared to the previous year, slipping back 20%.

Sector Analysis – Non-Residential

Overall, non-residential performance rallied during the Index period, with starts up against both the previous quarter and last year.

Hotel & Leisure experienced a strong period, with starts increasing 37% against the preceding three months to finish a staggering 71% up on the same time a year ago.

Education project-starts also grew, rising 31% against the preceding three months and increasing 29% against the previous year.

Offices had a good period, with the value of underlying project-starts increasing 24% against the preceding three months, standing 2% up on a year ago.

On the other hand, industrial project-start performance was dismal, suffering a 22% fall during the three months to November to stand 4% lower than a year ago. Community & amenity also fared poorly, with the value of project-starts falling back 14% against the preceding three months and 15% against the previous year.

Civils growth was poor, with starts decreasing 17% against the preceding three months and remaining flat against the year before. This was boosted slightly by infrastructure activity, with starts increasing by 1% against the preceding three months and by 36% on a year ago.

Utilities starts didn’t fare as well, declining 41% against the preceding three months to stand 34% down against the previous year.

Regional Analysis

Regional performance was mixed, with the North East the stand-out performer during the three months to November.

Starts in the North East increased 32% against the preceding three months. Despite this, starts failed to match 2023 levels, remaining a fifth behind.

London also offered a faint bright spot, with project-starts performing relatively well compared to the majority of the UK, increasing 11% against the preceding three months and 2% above the previous year.

The South East experienced a similar trend, advancing 3% against the preceding three months to stand 14% up on the year before.

Some areas of the UK fared less well, including Wales where the value of project-starts fell 30% against the preceding three months to stand a whopping 34% down on a year ago. This was also the case in Yorkshire & the Humber which crashed compared to the preceding three months and the previous year.