Glenigan reported that construction project-starts has more than halved (59%), against last year, but detailed planning approvals grew 17% compared with the year before.
Main contract awards experienced a 27% declined on the preceding period, this is 51% down when compared with the same period last year – regional performance is also poor across the board.
Glenigan’s economic director, Allan Wilen, said: “This underwhelming performance is symptomatic of a number of external constraints on the UK construction industry. High interest rates and a persistently sluggish economy are continuing to depress consumer and investor confidence, resulting in lower levels of activity across most of the private sector.
“The downturn in public sector project-starts is particularly concerning, pointing to ongoing challenges for government departments in prioritising capital projects, despite a significant rollover of capital underspends from the previous financial year.
“Nevertheless, our recent Construction Forecast anticipates industry recovery in 2024, with starts expected to grow 8% next year. Furthermore, the recent surge in planning approvals offers a small glimmer of hope, with the potential to provide plenty of opportunities for agile contractors over the coming years.”
Glenigan’s review focuses on the three months to the end of October 2023 covering all major (>£100m) and underlying (<£100m) projects, with all underlying figures seasonally adjusted.
Its review showed project-starts plummeted 27% against the preceding three months’ performance, to stand 59% lower than a year ago.
Overall residential starts-on-site fell significantly during the three months to October, dropping 23% during the index period to stand 30% lower than a year ago.
The value of starts fell across all non-residential sectors during the three months to October.
Industrial performance was disappointing, sinking 32% during the three months to October to stand 57% lower than a year ago. Retail lost ground as well, with the value of project-starts declining 3% against the preceding three months and 36% against the previous year.
Most parts of the UK experienced weak project-start performance during the three months to October. The West Midlands had a particularly poor period, with project-starts decreasing 27% during the three months to October and falling 43% against the year before.
It was a similar story in the Capital, with the value of project-starts decreasing 19% against the preceding three months and remaining 36% behind the previous year.
Scotland stumbled (-2%) compared with the previous three-month period, dropping 38% compared to the previous year. Yorkshire and the Humber, and the North West also suffered falls in project starts against both the preceding three months and previous year.