Growth in retail and leisure
Starts in the three months to February were 7% down on a year ago, but were little changed on the preceding three months, according to the latest figures from Glenigan.
Residential starts were 13% lower due to a weakening in both private and social housing projects, while non-residential project starts were 4% lower than during the three months to February 2017 as a decline in office, health and education projects outweighed increases in retail, and hotel and leisure work.
Allan Wilén, Glenigan’s economics director, said: “The February Index suggests that the flow of projects has steadied. While the value of underlying starts in the three months to February was 7% lower than a year earlier, on a seasonally adjusted basis starts were 1% ahead of the preceding three months.
“Strikingly, the private housing and industrial sectors, which have been recent areas of support have faltered over the last three months, but this weakness has been offset by a revival elsewhere – in retail, hotel and leisure, and utilities work.
“The recent improvement in the private housing sector has lost momentum. Private residential starts during the three months to February were 9% lower than during the same period a year ago. In addition, the smaller social housing sector has continued to fall away, being 8% down on September to November on a seasonally adjusted basis and 23% lower than a year ago.
“Overall non-residential projects were 4% lower than a year ago, but 17% up against the three months to November on a seasonally adjusted basis. The year-on-year decline is due to a sharp drop in office project starts and weakness in public sector funded areas such as health and education projects. The recent improvement in the industrial sector has also petered with projects starts 5% lower than a year ago. However, these declines have been partially offset by a strengthening in the retail, and hotel and leisure sectors.”
Regionally, the north west of England and Yorkshire and the Humber remain growth areas with the value of underlying construction starts 44% and 59% higher respectively during the three months to February than a year ago. There was also modest growth in starts in Scotland, the south west and the West Midlands. In contrast the value of project starts fell back sharply in the east of England, London, the north east, Wales and Northern Ireland.