The Glenigan Index April 2017

• Starts in the three months to April were 6% higher than a year ago.
• Residential starts were 26% higher than a year ago, with growth driven by a sharp rise in private housing starts.
• Non-residential project starts were 7% down on the same period in 2016, as a weakening in office, education and community & amenity work offset growth in industrial and health projects.
• Civil engineering starts were 7% lower than a year ago

The rise in project starts during the three months to April is encouraging and bodes well for construction activity during the year ahead. The 6% rise in starts is partly due to a bounce back in civils projects in March and April, together with encouraging increases in industrial and health project starts. However, the key driver for growth has been a marked strengthening in private residential projects. Private residential starts for the three months to April were 36% higher than a year ago and were also a third higher than during the three months to January 2017 on a seasonally adjusted basis. This renewed strengthening in starts is encouraging and should help sustain sector activity during the current year. Non-residential projects during the three months to April were 7% lower than a year ago and were also 10% down on the previous three months on a seasonally adjusted basis. Projects starts have grown sharply in the industrial and health sectors. A 35% rise in industrial project starts is especially positive and suggests that investors’ are now pressing ahead with projects that were initially reviewed after the EU referendum vote. Unfortunately, the strong growth seen in these sectors has been overshadowed by a weakening in other non-residential sectors such as offices, education, and community & amenity. There has also been a marked improvement in civil engineering project starts during March and April, with the rise in utilities work especially dramatic. This recent growth has helped to offset weak project starts in February. Civil engineering starts during the three months to April were 7% down on a year ago, but on a seasonally adjusted basis were 26% up on the three months November 2016 to January 2017. At a regional level, the North East, North West, South West and West Midlands all enjoyed double-digit growth, with project starts during February to April 2017 being 24%, 28%, 34% and 25% up respectively on a year earlier. There was also more modest growth in the South East, Scotland and Yorkshire & the Humber. The value of project starts slipped back elsewhere; at 27% the Northern Ireland saw the sharpest drop in project starts during the period.