Glenigan’s latest monthly report on the state of the industry shows declines in both the residential and non-residential sectors, resulting in an overall drop in project starts.
Overall, the value of underlying work starting on-site in the past three months was 3% lower than in the preceding three months and 7% lower than a year before.
While there has been growth in civil engineering starts, Glenigan puts little hope that this will continue, given the new Labour government’s review of road spending
represents a slight silver lining in an otherwise disappointing set of results, these positive figures will likely be short-lived as the overall future of major public projects hangs in the balance. It’s further tempered by a generally gloomy short-term outlook for the sector, with poor performance recorded across residential and non-residential verticals, implying tough times ahead in the immediate future.
“The overall future of major public projects hangs in the balance,” the report says.
Glenigan economic director Allan Wilen said: “Many will be disappointed that the hopes of revival, often heralded by the election of a new government, have not yet come to fruition. Confidence remains low in the private sector, not helped by the prospect of the upcoming autumn budget statement, which many see sweeping changes to tax and planning policy. Investors are, understandably, cautious.
“Likewise, a lack of clarity on public sector spending has also pushed back project start dates and left some up in the air altogether. Everyone will be on tenterhooks to see what will come out of the Spending Review, but this is still months away and leaving many high and dry. It makes an uncertain situation even more precarious, and the sector is in a delicate position, highlighted by the collapse of ISG and its subsidiaries last month.
“However, the sector has weathered far worse storms than this, and it was encouraging to see hotel & leisure starts way up on previous figures, hinting at a much-needed revival in one of the UK’s hardest-hit verticals. Hopefully, clarity on the announcements will help to assuage the unease, which is having a significant knock-on effect on almost every other vertical, dampening overall construction-starts.”
