The value of construction projects starting on building site in January was 8% lower than in January 2009 according to the latest Glenigan Index.
The huge country-wide snowfalls delayed project starts, particularly in the non-residential sector.
“Glenigan forecast a gradual recovery over the course of 2010 as private sector confidence grows, however Government spending cuts will remain a drag,” said Allan Wilen, economics director at Glenigan. “The industry is bracing itself for further delays with expectations of more snow and sub-zero temperatures in February.”
Housing projects peaked at 27% higher by value year on year in October 2009, although new housing projects were particularly affected by the bad weather; the value of projects starting on site in January 2010 was 1% lower than January 2009.
The Glenigan Residential Index for January 2010 was 74.4 versus a 2006 base of 100. New non-residential projects continue to be particularly weak due to low confidence in the private commercial and industrial sectors. The Glenigan Non-Residential Index for January 2010 was 88.1 compared to 102.3 for January 2009, a 14 per cent fall.
Wilen said: “The pick-up in project starts during the autumn indicates that housebuilders are preparing to capitalise on the anticipated modest improvement in market conditions and a gradual recovery in new residential projects is forecast over the course of this year.”
He added, “Weak household earnings and consumer confidence, combined with limited mortgage availability are expected to restrict the pace of recovery in new house sales during 2010”.