The rise in project starts during the three months to April is encouraging and bodes well for construction activity during the year ahead, according to the latest Glenigan Index.
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.
