Turbulent times for Construction industry
- Starts fall 20% in the three months to January.
- Heavy rainfall and waterlogged sites preventing project starts
- Wet weather exacerbates a slowdown already affecting the industry.
- Construction flounders UK-wide, but Northern England and Midlands ahead over last 12 months.
The value of new work starting on site* fell by a marked 20% in the three month period to the end of January, compared to the same period of 2014/15. Office construction was the only sector of the industry to edge higher, with starts declining across residential, non-residential and civil engineering work.
Glenigan Index
Glenigan’s monthly barometer of project starts has been in negative territory for eight out of the last ten months. However the latest figures give the strongest evidence yet that construction’s prospects have weakened markedly since this stage a year ago.
Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “The atrocious weather has clearly halted project starts.”
“This has exacerbated an already evident softening in workloads, with new construction activity now in the worst period of decline since crashing in 2009.”
He added: “The official output figures show R&M spending by both government and private institutions was already slowing in the second half of last year.’”
Mr Wilén concluded: “Glenigan’s data on project starts suggests that new build activity will also be constrained in the coming months.”
The dire weather impacted construction sites across the UK; only Wales saw starts hold above the level of a year earlier. Over the 12 month period to the end of January work is down across the UK as a whole, but the Midlands and Northern English regions are outperforming.
Yorkshire and the Humber, the North East and West and the East and West Midlands are all in the black. By contrast starts have contracted in the Capital and most of Southern England. Wales, Scotland and Northern Ireland’s construction industries have all sunk lower over the last 12 months.
Glenigan Indices
|
|
Glenigan Index |
Residential |
Non-residential |
Civil engineering |
||||
|---|---|---|---|---|---|---|---|---|
|
|
Index |
% Change |
Index |
% Change |
Index |
% Change |
Index |
% Change |
|
Jan-15 |
116.4 |
11% |
130 |
16% |
99 |
9% |
148 |
4% |
|
Feb-15 |
115.2 |
17% |
125 |
21% |
100 |
12% |
150 |
23% |
|
Mar-15 |
123.9 |
11% |
136 |
19% |
107 |
4% |
162 |
14% |
|
Apr-15 |
102.0 |
-6% |
110 |
4% |
90 |
-13% |
130 |
-8% |
|
May-15 |
99.8 |
-11% |
109 |
1% |
89 |
-13% |
119 |
-29% |
|
Jun-15 |
97.5 |
-17% |
98 |
-15% |
94 |
-14% |
112 |
-30% |
|
Jul-15 |
102.9 |
-15% |
103 |
-17% |
104 |
-5% |
97 |
-41% |
|
Aug-15 |
114.4 |
-9% |
119 |
-4% |
113 |
-6% |
107 |
-29% |
|
Sep-15 |
122.7 |
1% |
134 |
16% |
115 |
-6% |
122 |
-11% |
|
Oct-15 |
120.0 |
6% |
126 |
18% |
113 |
-2% |
131 |
5% |
|
Nov-15 |
108.1 |
-1% |
107 |
-4% |
106 |
1% |
122 |
3% |
|
Dec-15 |
85.3 |
-13% |
85 |
-21% |
83 |
-7% |
96 |
-15% |
|
Jan-16 |
93.7 |
-20% |
111 |
-15% |
83 |
-16% |
85 |
-43% |
Note: Includes underlying projects which are schemes with a construction value of £250,000 to £100 million
r – Revised, p – Provisional. Percentage change is against the same period of previous year.
Source: Glenigan
*Note on the statistics
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.