The value of work starting on site in the three months to September was 9% down on the same period of a year ago, according to the latest Glenigan Index.
Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “The 9% decline in the Glenigan Index covers project starts in the immediate aftermath of the EU referendum.
"Given the current high levels of political and economic uncertainty, the weakness of the industrial and commercial sectors is unsurprising as many private sector investors are continuing to defer investment decisions.
“The strength of residential activity is more encouraging and was driven by increases in both private and social housing projects starting on site. The development pipeline is also encouraging with residential approvals during the first nine months of 2016 being 26% up on a year ago.
“Looking further ahead, the political rhetoric at the Conservative Party conference included plans for additional investment in the built environment, especially housing. The forthcoming Autumn Statement should provide greater clarity on the scale and timing of the Government funding that will be available to help boost house building and to accelerate other planned public sector construction projects.”
Regionally the decline in UK project starts was led by declines in the north and east of England. The East Midlands, North East, the East of England and Yorkshire & the Humber endured the sharpest declines with the value of project starts dropping by 24%, 50%, 39% and 43% respectively on a year ago. Project starts were relatively stable in London and the South West, with declines of just 2%. In contrast the South East and Scotland were 12% and 8% up on a year ago respectively. In addition starts were also sharply higher in Northern Ireland.
The Glenigan Index of project starts provides a leading indicator of construction activity in the UK. It is based on data collected about every construction project which started on site during the previous three-month period. The Index covers civil engineering, office and commercial projects over £250,000 and more than 10 units for residential property. It excludes any project over £100 million.
