The recovery in construction activity is gaining momentum, according to the latest industry analysis by Glenigan.
While project-starts are still below pre-pandemic levels, the last few months have seen a strong and encouraging rise. Plus, the development pipeline is ahead of 2019 levels, pointing to a sustained recovery in project-starts over the coming months.
The value of projects starting on site averaged £5,212 million per month during the three months to April; an 18% increase against the preceding three months and 37% higher than a year ago.
The rise against the preceding three months was due to increases in both the value of major projects starting on site and in underlying market activity (under £100m). At an average of £1,109 million a month, major projects were 23% higher than during the previous three months and 69% up on a year ago. At £4,104 million the value of underlying projects was 28% up on the previous three months, on a seasonally adjusted basis, and 30% higher than a year ago.
The value of contract awards rose 36% against the preceding three months to stand 50% up on a year ago and 12% above the same period in 2019. Major contract awards rose by 44% during the three months to April and were 97% up on a year ago. Underlying contract awards increased by 34% compared to the preceding three months (seasonally adjusted) to stand 38% higher than a year ago.
The value of work securing detailed planning consent during the three months to April rose by 3% against the preceding three months and was 37% higher than a year ago. The value of major projects securing planning approval declined by 22% against the preceding three months but was 5% higher than a year ago. The value of underlying detailed planning approvals grew robustly, rising by 12% against the preceding three months (seasonally adjusted) and by 53% compared to a year ago.
The recovery in work on-site stalled during the three months to February, according to the latest official data from ONS, with output slipping by 1.0% against the preceding three months to stand 5.8% down on a year earlier. However, we expect the pause in output growth to be short-lived, with the rise in project-starts lifting on-site activity over the coming months.
Overall repair and maintenance output was stable during the three months to February and 3.2% ahead of a year ago.
New-build output slipped back 1.6% against the previous three months and was 10.5% lower than a year ago.
Commercial and social new-housing output remained significantly down on a year ago with falls of 20% and 29% respectively.
Industrial sector activity also fell back after strong growth last autumn, with output 14% down on the preceding three months and 27% lower than a year ago.
In contrast, new public non-residential output rose by 4% and was just 4% lower than a year ago.
