Projects on hold fall in March

Last Updated:

22nd April 2013

Glenigan data show that the value of projects being placed on hold fell in March this year by 42% to just under £500m from £860m in March 2012. The fall in value of projects going on hold comes at a time when Glenigan data on project starts show that underlying starts in the first quarter of the year have suffered steep declines across many sectors of the construction industry. Falls in projects on hold do however seem to be in line with those few sectors that have seen starts increase in the first quarter of the year; education, health and other public building.

Chart 1: Value of Projects on Hold

Health and education projects on hold this March fell, down 60% and 25% respectively; underlying starts in both of these sectors were strong during the first quarter of 2013. Also in line with our project starts data the value of community and amenity, essentially other public sector projects, placed on hold declined in March to just £9m from £37m worth of projects placed on hold in March last year. The value of underlying starts in the sector increased by 9% in the first three months of the year compared to the same period of 2012. The decline in the value of projects placed on hold adds weight to the idea that it is public sector construction that has provided what little life there was in the industry during the first quarter of 2013.

The value of private housing contracts placed on hold increased in March to £206m from £132m in February and once again accounted for the largest proportion of projects being placed on hold. The value of private housing projects being placed on hold steadily fell between the highs of 2008 and 2012. The opening months of 2013 however have shown a reversal in this trend and the number of projects on hold in the sector has been consistently above 2012 levels. The increase in private housing projects on hold is in line with Glenigan data on projects starts, which shows underlying project starts in the first quarter of the year are almost 25% lower than the first quarter of 2012. Despite these worrying signs we still expect private housing activity to pick up during the second half of this year.