A spring in the step for construction starts

The value of work starting on site in the three months to March was 2% higher than during the same period a year ago, according to the latest Glenigan Index. On a seasonally adjusted basis, starts were also 2% up on final three months of 2016.

Allan Wilén, Glenigan’s economics director, said: “A strong rise in project starts in March has offset earlier weakness and lifted the index for the first quarter of 2017. The increase is partly due to a bounce back in civils projects in March. In addition there have been encouraging increases in industrial, hotel and leisure, and health project starts.

“Private residential starts for the three months to March were 6% higher than a year ago and 3% up on the previous quarter on a seasonally adjusted basis. This renewed strengthening in starts in encouraging and should help sustain sector activity during the current year.

“Looking further ahead higher inflation is set to squeeze household spending and to dampen activity in the wider housing market. Against this weaker market background we anticipate a softening in private housing project starts during the second half of 2017.”

At a regional level, the south east, north east and east of England, together with Wales, enjoyed double digit growth, with project starts during the first quarter being 27%, 19%, 14% and 13% up respectively on a year earlier.

There was also renewed growth in the capital, while the value of starts in the north eest of England also improved. The value of project starts slipped back elsewhere; at 20% the West Midlands saw the sharpest drop in project starts during the quarter.