Weakening in industrial & commercial work hold back project starts 

•    Starts in the three months to October were 5% lower than a year ago and 8% down on the previous three month.
•    Non-residential project starts were 11% down on a year ago and 14% lower than during the three months to July 2016. Office and industrial project starts were especially weak, being 45% and 43% down respectively on a year earlier. 
•    Civil engineering projects also dampened overall starts, being 2% down on a year ago. 
•    Residential starts were relatively stable; despite being 2% down on the preceding three months starts were 4% up on a year ago.

The value of work starting on site* in the three months to October was 5% down on the same period of a year ago, according to the latest Glenigan Index. 

Commenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said: “A shifting pattern of industry workload is emerging following the EU referendum vote. The Glenigan Index recorded a 5% decline in underlying construction projects starts during the three months to October. The drop in starts was largely driven by sharp declines in industrial and commercial projects starts. In contrast other sectors, in particular private housing, have remained firm, while a sharp rise in hotel & leisure work is also encouraging. 

Private residential starts were 4% up on a year ago, despite being slightly down on the preceding three months. Furthermore the development pipeline continues to strengthen, with the private residential approvals during the three months to October 11% up on a year ago. In contrast social housing starts were 6% down on a year and a decline in planning approvals points to a further weakening in starts during the near term. 

“Looking further ahead, the political rhetoric at the Conservative Party conference included plans for additional investment in the built environment, especially housing. The Autumn Statement later this month should provide greater clarity on the scale and timing of any Government funding that will be available to help boost house building and to accelerate other planned public sector construction projects.”

Regionally the south and east of England were the principal parts of the UK to suffer a weakening in project starts during the three months to October 2016.  The East Midlands, the East of England, Yorkshire & the Humber, London and the South East endured declines in the value of project starts of 25%, 13%, 22%, 14% and 10% respectively on a year ago. In contrast the west of England saw a strengthening in project starts while starts in Scotland were 30% up on a year ago.