Glenigan’s December Construction Index paints a bleak picture for the UK construction industry, with project starts plummeting 25% compared to last year. Residential and non-residential sectors were both impacted, signaling a challenging period for the built environment
Glenigan’s December Construction Index reveals disappointing results, indicating a consistent decline in new project starts throughout the year.
Work starting on site fell by 12% in the last three months, concluding 25% lower than figures from 2022.
The broader economic downturn has led to low private investor confidence, resulting in a significant overall slump in construction activity across various sectors.
There was a 39% drop in project starts compared to 2022
Glenigan’s December Construction Index revealed that in the residential sector, starts experienced a modest dip of 3% compared to the previous three months, with private housing showing resilience.
However, non-residential performance remained lackluster, with an overall 24% decrease in project starts against the preceding three months, contributing to a significant 39% drop compared to the previous year. Retail was the only sector showing growth (5%) in the past three months.
There was varied regional performance across the UK
Regional performance during the Index period varied significantly.
Yorkshire & the Humber experienced a notable 18% increase in project starts, while other regions faced declines.
London and the South East saw milder decreases of 3% and 8%, respectively, compared to the preceding three months.
However, the impact was more severe in areas like the North East, Northern Ireland, and the East of England, where starts plummeted by 30%, 29%, and 19%, respectively, against the previous three months.
Despite low construction starts, residential activity has begun to stabilize
Commenting on Glenigan’s December construction index, Allan Wilen, Glenigan’s economic director, said: “Construction starts remain low after sharp falls earlier in the year.
“However, there are tentative signs that residential activity has begun to stabilise. Private housing starts were little changed on the previous three months. Reflecting the findings of our latest Forecast, this could be taken as the first signs of the recovery expected to kick in during the second half of 2024.
“However, elsewhere high-interest rates and a weak economic outlook continue to deter private non-residential investment while government-funded health and education starts were down sharply on the previous three months.”
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