Social housing projects fall
Published: 23 March, 2011
UK: New private residential developments fell 41% in the three months to February compared to a year ago according to the latest Glenigan Index.
According to James Abraham, economist at Glenigan: "New social housing projects fell 36% over the three months to February as a result of government cutbacks that are planned to increase over the next two years."
Social housing starts are set to remain under pressure over the coming months. A return to growth in private housing starts is anticipated by the end of the year, however poor household earnings growth and high unemployment, combined with limited mortgage availability and stalling house prices, will hamper the recovery.
In other construction sectors, non-residential project starts were down 7% year- on-year for the three months to February. This was said to be due to government funding cuts combined with poor weather and the usual seasonal lull that depressed private starts.
The underlying value of office starts fell by one-fifth during the three months to February. Retail, industrial and hotel and leisure starts all declined by around 10%. "Falling vacancy rates and rising rentals are expected to promote growth in the industrial and office sectors, especially during the second half of 2011" said Mr Abraham.
Civil engineering project starts were 2% down on a year ago as utilities project starts continue to decline while infrastructure starts stabilised over the three months to February. Increased investment by the regulated utilities is forecast to lift project starts over the longer-term.