Construction starts to stabilise

Published:  17 July, 2009

UK: Scotland and Northern Ireland are bucking the trend of declining numbers of projects starting on-site.

The June Glenigan Index reveals that promised government investment has begun to filter through, helping to steady the flow of new projects starting on-site after the sharp falls endured over the last year.

The Glenigan Index, which tracks the underlying value of construction projects, saw the year-on-year decline in June 2009 ease to 20%. This compares with year-on-year declines of 3% in recent months.

Increasing public sector projects, primarily in the education, health and social housing sectors are the main areas of support. They are helping to counter sharp falls in the flow of private sector projects.

While most regions have suffered a fall in project starts, Scotland and Northern Ireland bucked the trend.

Education projects were the main driver for Northern Ireland. In contrast, the West Midlands, the North East and South West of England have suffered the sharpest falls in projects starting on site.

According to economics director Allan Wilén: "We expect the current divergence in between the housing sector to widen over the coming months with an increase in social housing projects contrasting with a depressed private sector development that remains constrained by poor conditions in the wider housing market.

“The fortunes of non-residential construction will be mixed. The boost from the public sector purse will be offset by weak activity in the office, industrial and retail sectors.

“Civil engineering projects starts will strengthen as new renewable energy, rail and road schemes commence."

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