The Glenigan Index – January 2017

The value of work starting on site in the three months to January was 9% lower than during the same period a year ago, according to the latest Glenigan Index. On a seasonally adjusted basis, starts were also 2% lower than during August to October 2017. Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “The decline in the index is disappointing. However, the fall is in large part due to a sharp drop in the value of private housing starts that is expected to prove temporary." “Private residential starts for January were 24% down on a year ago. However, the sharp fall was prompted by the absence of higher value projects starting on site in London and the South East and nationally the number of projects was little changed on a year ago. Whilst conditions in the wider housing market are expected to be more challenging over the coming year, we still expect sector starts to stabilize over the coming months. In addition, the social housing sector has shown signs of recovery. Whilst the value of project starts during the three months to January was 4% lower than a year ago, on a seasonally adjusted basis starts were 5% up on August to October 2016." “Non-residential projects were 3% up on a year ago, driven by an increase in public funded work and a recovery in industrial and commercial starts from the lows seen in the immediate aftermath of the EU referendum vote. " “Civil engineering remains a drag on underlying project starts, being 25% down on a year ago, with the utilities sector being especially weak.” At a regional level, project starts have continued to weaken in London and the south east, falling by 15% and 26% respectively against a year ago. The value of starts in the East Midlands was also sharply lower, being 41% down on a year ago, while Scottish project starts were down by a third. In contrast Northern Ireland, the north east of England, the East of England and Yorkshire & the Humber all experienced a strengthening in project starts, growing by 63%, 73%, 18% and 10% respectively.