Decrease in value of work starting on site is 'disappointing', says Glenigan

Despite an increase in non-residential projects, there was a "disappointing" fall in the value of construction work beginning on site at the start of 2017, with a decline in civil engineering projects continuing to be a drag on the sector, new figures reveal.

According to the latest seasonally adjusted Glenigan Index, starts in the three months to February were three per cent lower than during September to November 2016. There was also a one per cent year-on-year decline.

However, there was some good news with non-residential projects up 13 per cent on a year ago and a marked improvement in private sector activity.

The industrial, office and hotel and leisure sectors all improved and non-residential starts were also boosted by increases in health and community amenity work.

However, civil engineering was 44 per cent down on a year ago, with the utilities sector suffering more than the infrastructure sector.

The east midlands (six per cent), north east (51 per cent) and south west of England (27 per cent), Wales (65 per cent) and Northern Ireland (42 per cent) all saw project starts increase when compared to the previous year, while projects starts were weaker in the north west (-20 per cent), west midlands (four per cent) and Yorkshire and the Humber (-4 per cent).

"The decrease in the index is disappointing," said a Glenigan spokesperson.

"However this is in large part due to a sharp drop in civil engineering projects. The flow of non-residential starts is more encouraging, suggesting that investor confidence has begun to stabilise.

"Looking ahead higher inflation is set to squeeze household spending and to dampen activity in the wider housing market over the coming year.

"Against this weaker market background we anticipate a softening in private project starts during the second half of 2017.”

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