Construction Start Ups Slip 7 Year Year Three Months Straddling Eu Referendum Vote Reveals Glen

New figures show that construction start-ups fell 7% year on year, and by more than a fifth when compared to the first quarter of 2016, in the three months preceding the EU referendum vote.

According to the most recent Glenigan Index, project starts fell 21% in the second quarter of the year, reflecting “the impact of the related political and economic uncertainty on investor nerves”

However, there was good news for residential starts, which increased by 3% in August despite being 15% lower than the previous three months.

Non-residential project starts were 13% lower year on year and 24% lower from March to May, while office project starts were half the level seen in the previous three months and 43% lower year on year.

Public sector non-residential areas were also down compared to the same three months last year, while civil engineering project starts dampened overall starts, which were down 34% year on year.

Regionally, the value of project starts was generally lower than it was a year ago. However, the South East and South West of England and Wales defied the trend, with underlying starts increasing over the previous year. Starts were also significantly higher in the north of the United Kingdom.

Glenigan’s economics director, Allan WilĂ©n, stated, “The 7% decline in project starts reflects, in part, the impact of related political and economic uncertainty on investor nerves.”

“Non-residential project starts were especially weak, owing to fewer office, hotel & leisure, and industrial projects breaking ground.” This, along with a drop in civil engineering projects, contributed to the index’s overall decline in comparison to both the previous three months and a year ago.

“Despite a 15% decline in the three months to May, residential project starts were 3% higher than a year ago.” Private residential starts remained unchanged from the previous year, while social housing starts increased 10%.

“Despite a recent slowing in project starts, the potential development pipeline remains solid.” The value of projects that received detailed planning approval during the first eight months of 2016 increased by 3% over the same period last year.

“However, the fastest growth in approvals has been in sectors where project starts have been most impacted by referendum uncertainty, such as private housing, industrial and commercial developments. Investors will be watching the economic environment closely in the coming months to see if there are any implications for planned projects.

“This is likely to stymie the progress of some projects to work on site, and we anticipate a general slowdown in project starts during the second half of 2016.

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Last Updated on December 29, 2021

Indra-Gupta

Author: Indra Gupta

Indra is an in-house writer with a love of Newcastle United and all things sustainable.

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