Construction Project Starts Dip on Referendum Uncertainty

 

  • Starts in the three months to June were 10% up on a year ago, but 15% down on the first quarter of 2016
  • Residential starts were unchanged against last year’s levels, but 32% down on the preceding first three months of 2016
  • Non-residential project starts were up 24% on the second quarter of last year and 5% ahead of the first three months of 2016. Office project starts dropped 28% against the preceding three months, but were still 17% up on a year ago. Public sector non-residential areas were also up on a weak performance a year ago when project starts were delayed by the General Election
  • Civil engineering projects starts dampened overall starts, being 11% down on a year ago

 

The value of work starting on site in the three months to June was 10% up 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: “Project starts during the three months to June were 15% down on preceding three months as private investors deferred starting projects ahead of the EU referendum. However starts were still ahead of the second quarter of 2015 when the General Election had a similar disruptive influence on projects.

“Non-residential project starts were particularly weak, due to fewer office and industrial projects commencing on site. This combined with a fall in civil engineering project contributed to the overall decline in the index against the first quarter of this year.”

“The development pipeline remains firm. Overall the value of projects securing detailed planning approval during the first half of 2016 is 5% up on a year ago.”

“However the strongest growth areas have been private housing, industrial and office developments and we anticipate that the uncertain economic and political outlook will disrupt the progress of some projects to work on site. Accordingly, we expect an overall weakening in project starts during the second half of 2016.”

Regionally the North East, South West and Yorkshire & the Humber were the only parts of the UK were starts were up on the first quarter of last year. However, there was a more mixed performance against the second quarter of 2015, with the value of underlying starts in London, the South East, West Midlands Yorkshire & the Humber, Scotland and Norther Ireland all posting double digit gains against a year ago.

The full story and Glenigan indices can be viewed by clicking here.

Source: https://www.glenigan.com/project-starts-dip-on-referendum-uncertainty

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