Construction starts rise as confidence returns

The value of underlying construction work (under £100 million in value) starting on-site during the three months to April 2021 was 30% higher than a year ago and 18% higher than the preceding three months on a seasonally adjusted basis.

Residential starts experienced the greatest growth of 35% against the previous year as well as 14% growth compared to the preceding three months.

Non-residential work commencing on site climbed by a third compared to a year ago and by a quarter against the preceding three months.

Underlying civil engineering project-starts increased 10% against the previous year and 6% compared to the preceding three months.

Rhys Gadsby, Glenigan’s economic analyst, said: “Most sectors achieved strong growth during the three months to April compared to the severely impacted performance, due to the first national lockdown, last year. As encouraging as this up-tick is, underlying-starts were still 12% lower than the same period in 2019.

“However, it is clear that a recovery is underway. Underlying project-starts during the three months to April were 18% higher than the preceding three months (seasonally adjusted), with most sectors and regions experiencing growth. Confidence in the construction industry is particularly high, with many contractors announcing strong order books for 2021 and 2022. We expect this to be a contributing factor to continued growth in project-starts heading into the summer.”

Private housing project starts performed very strongly and climbed 61% against the previous year and 21% compared to the preceding three months. In contrast, social housing project-starts performed poorly and declined 11% against the previous year and 5% compared to the preceding three months. While private housing work starting on site was 5% lower than two years ago, social housing project starts were 26% lower.

“Project-starts in the south west performed very well during the three months to April, climbing 62% against the previous year and 54% compared to the preceding three months (seasonally adjusted),” Rhys said. “Project starts in the region were 11% higher than they were two years ago. The East Midlands was another region to experience a strong period, with project starts having increased 59% against the previous year and 43% against the preceding three months. Work starting on site in the East Midlands was 9% higher than two years ago.

“Scotland experienced growth of 62% against the preceding three months as well as the greatest growth of 95% against the previous year. Project starts in Scotland were 26% higher than two years ago. London experienced 45% growth in the value of project-starts against the previous year and 44% compared to the preceding three months. However, construction-starts remained 7% lower than two years ago. Three regions witnessed a decline in project-starts compared to the three months to April 2020, including the south east where project starts fell 5%.”