Housing starts remains strong in November

• Glenigan Index for the three months to November up 3% compared to the same period a year ago. 
• Continued strength from the private housing sector joined by a positive turnaround in fortunes of social housing sector.

Underlying construction activity bounced back in November, the Glenigan index of project starts was up 3% for the three months to November compared to the same three month period of 2011. Private housing has once again been the strongest sector this month; underlying new work was up 50% over the period compared to last year.

“Private housing construction continues to go from strength to strength in the latter part of this year, it is clear that there is the demand for houses in the country and it looks like the flood of measures put in place by the government over the past year are beginning to have a sustained positive impact on the housing market and construction activity.” Commented Glenigan Economist Andrew Whiffin.

There was also a turnaround in social housing project starts in November, the sector which has seen seven months of straight decline saw new work jump by 11% in the three months to November. “The turnaround in the sector is a bit of a shock but the steep increase this month has a lot to do with the weakness of the sector at the end of last year rather than any strength in the latest data. Fundamentally little has changed and cuts to capital budgets will continue to weigh heavily on the sector.”

Chart 1: Glenigan Index

In other news from this month’s index the slump in retail activity that began in September has continued in November; new projects were down 36% compared to the same period last year. “Retail sector projects have been dominated by the supermarket chains in 2012; their expansion programmes drove growth over the first half of the year and it is the throttling back of these programmes that has led to a slowdown as we head into 2013,” commented Whiffin.

The slowdown in public sector new work also continued in November; education starts were down 32%, health starts down 31% and community and amenity were down 20%. Government cut backs and a lack of private sector investment incentives will continue to be the main hurdles to project starts across these areas well into 2013.