February rise for project starts
- Project starts in February 6% higher than a year ago.
- Strengthening private sector development pipeline after strong rise in planning approvals over last 12 months
- Early EU referendum vote promises to minimise political delay to private sector investment.
- Starts 23% lower in the three months to February due to weak December and January.
Overall the value of new work starting on site* fell by a marked 23% in the three month period to the end of February, compared to the same period of a year ago. However, this is due to weak starts during a waterlogged December and January and masks a 6% rise in February.
The rise in February starts is encouraging, with the industry beginning to press on with projects delayed by the atrocious weather conditions seen at the turn of the year.
Furthermore the progressive rise in projects securing detailed planning approval over the last year has ensured that the industry has a strengthening pipeline of potential work, especially from the private sector.
Glenigan Index: March 2016
Private investor confidence will be key to how quickly these projects move to site over the coming months. The Prime Ministers decision to call an early EU referendum on 23 June is good news for the industry as it minimizes the period of political uncertainty for investors.
Accordingly while the impending vote is likely to dampen project starts in the near term, the second half of 2016 could see a sharp rise in activity as private investors press ahead with projects once the issue of EU memberships has been resolved.
Project starts strengthened across the east and south of the country during February as ground conditions improved. Midlands and Northern English regions are outperforming. The south east saw the sharpest rise in project starts during the month, being 91% up on a year ago, but there were also strong monthly increases in London, the East of England and Yorkshire & the Humber.
Glenigan Indices (underlying* projects up to £100 million)
|
|
Glenigan Index |
Residential |
Non-residential |
Civil engineering |
||||
|---|---|---|---|---|---|---|---|---|
|
|
Index |
% Change |
Index |
% Change |
Index |
% Change |
Index |
% Change |
|
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-15r |
129.8 |
14% |
142 |
32% |
121 |
5% |
130 |
5% |
|
Nov-15r |
127.1 |
17% |
133 |
20% |
125 |
19% |
119 |
0% |
|
Dec-15r |
102.2 |
4% |
108 |
0% |
102 |
14% |
88 |
-22% |
|
Jan-16r |
93.1 |
-20% |
95 |
-27% |
95 |
-4% |
77 |
-48% |
|
Feb-16p |
88.4 |
-23% |
92 |
-27% |
89 |
-12% |
78 |
-48% |
Note: *, underlying projects are valued over £250,000 and under £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.