Construction growth in the three months to June was at its highest peak since the start of the year, according to figures from industry analysts Glenigan.
The Glenigan Index, which covers the value of projects starting on site from March to May, is 20% higher than a year ago – the biggest increase since January.
These latest figures - driven by a renewed strengthening of non-residential work - follow reports from business lobby group the Confederation of British Industry (CBI) that the economy is growing at its fastest pace since its records began in 2003.
The Glenigan non-residential index is up by 24% compared to the same period in 2013, the strongest rate of growth seen since the three months to January of this year. This rise has been largely fuelled by the private sector, with the industrial, office and hotel and leisure sectors all seeing healthy improvements in the value of starts.
Glenigan data suggests that house builders are continuing to open up new construction sites in response to strengthening demand. The value of private housing starts was up by a fifth, matching the strong performance recorded in last month’s Index and marking the fourteenth consecutive month of rising private housing starts.
Commenting on this month’s figures, Allan Wilén, Economics Director at Glenigan, said: “As we head towards the mid-point of 2014, the prospects are improving for construction volumes across the whole of the UK.
“A renewed strengthening of non-residential work is the most significant driver of the high 20% increase recorded in our latest Index, though the underlying value of project starts also increased across the housing and infrastructure sectors.”
He added: “The flow of non-residential development showed a pause in the first quarter of 2014, with a modest 1% rise in the value of starts. This came as the rate of growth slowed in commercial work, remaining just sufficient to offset weakness in public sector construction.
“However the latest figures show a renewed expansion in the underlying value of starts.”
Elsewhere in this month’s Index, there were positive signs from the public sector. Education and health starts both rose, with community and amenity work the only area seeing a fall. While growth in education fits with the longer term upward trend, the recent upturn in medical construction is not expected to be sustained.
Social housing work has also fallen back over the last three months, with the underlying value of starts down 13% compared to a year earlier.
In contrast, underlying civil engineering starts have expanded at the fastest pace of the three main industry groupings, rising by 38% in the latest period. Work continues to rise across both the infrastructure and utilities sectors, which saw starts up by 29% and 50% respectively compared to 2013.
This widespread growth across the industry was reflected in a buoyant regional picture. Barring Yorkshire and the Humber, where starts were flat on a year ago, every other part of the UK saw an uplift in activity. Strong growth in the East of England was sustained into the three months to May, buoyed by civil engineering work. Scotland and North East England also saw marked improvements relative to a year earlier.
The monthly Glenigan Index is based on extensive research of every construction project starting in the UK over the previous three-month period, providing an indicator of developing activity and future output in the industry.
