Election causes delays and hesitancy in public sector starts

The value of work starting on site in the three months to July was 10% lower than during the same period a year ago, according to the latest Glenigan Index. However, on a seasonally adjusted basis, starts were 6% higher than during February 2017 to April 2017.

Commenting on this month’s figures, Allan Wilén, Glenigan’s economics director, said: “The year on year decline in project starts is in part due to decisions on public sector projects being temporarily delayed by the snap general election, with education, health, infrastructure and community and amenity sectors witnessing the sharpest declines.

“We anticipate that these delayed projects will bolster starts over the coming months as work gets underway post-election. Private sector starts have performed better, although there has been a weakening in a number of areas.”

Overall non-residential projects were 15% down on a year ago, but on a seasonally adjusted basis were 7% up the preceding three months.

“Private residential starts plateaued during the three months to July, being little changed on the preceding three months or the level of a year ago,” Allan said. “The stabilisation in project starts follows quieter conditions in the wider housing market. In contrast, there has been an encouraging upturn in social housing starts, which on a seasonally adjusted basis were 23% up on February to April 2017.”

While most parts of the UK saw a decline, the value of project starts rose in the north of England, with year-on-year increases of 10%, 19% and 8% in the north east, north west, and Yorkshire and the Humber respectively. The sharpest growth, however, was in the east of England, where starts were 60% up on a year ago.