March Construction Market Review and Forecast

Table 1: Underlying construction starts and planning approval

March Construction Market Review and Forecast: Growth in project starts continue

The Glenigan Index for February increased by 17% on a year ago. A high value of new civil engineering and residential projects started on site over the turn of the year.

Once again there was a lack of health, education and hotel & leisure work weighed on the level of new projects. However, last winter’s poor weather conditions weighed on the value of starts over the three months to February 2011, and this has boosted the comparison to this year.

Key Stats

The underlying value of private housing construction project starts increased 42% year on year for the three months to February. Growth has been concentrated in London, the South and East of England. Scotland, the East Midlands and Yorkshire & the Humber saw declines in housing starts. Glenigan forecast private housing starts to remain buoyant over the coming months despite the increase being exaggerated by the impact of the severe winter of 2010/11 on project starts.

Civil engineering project starts increased 63% year on year for the three months to February. Utilities and infrastructure sectors saw significant increases in project starts with investments in rail projects in London and the South of England and heavy investment in Scottish utilities projects including recycling plants and wind farms.

As well as the 17% increase in the underlying value of project starts over three months to February, Glenigan recorded an 11% in the value of planning approvals over the same three months.

There was a strong flow of commercial planning approvals over the three months to January. In addition, there was a high level of the civil engineering projects gaining approval over the same period, and private housing approvals also increased on a year ago.

Around the UK, the North East, East and South East of England saw a high level of approvals over the three months to January.

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