The mixed economic outlook and the fall-out from the Ukraine war have
inevitably slowed the pace of recovery across the industry.
Yet the latest Glenigan Construction Review shows that main contract
awards and detailed planning approvals did register an increase in the three
months to April on the previous three months, even if they did not match last
year’s levels.
The Review also points to some encouraging trends which highlight those
construction sectors and regions which are maintaining momentum and where new
work opportunities are available.
New activity based on the value of project starts in the offices, private
residential and retail sectors all improved in the quarter to April on the
previous three months and hotel & leisure work was well ahead of the period
a year ago.
Across the UK regions, the North East, West Midlands and Northern Ireland
all saw notable increases in the value of project starts in the quarter to
April, compared to the previous three months.
Better times could also be on the horizon for contractors tendering for work
on major projects. In the three months to April, major project planning
approvals recorded a sharp 26% rise on the previous quarter and stand 15% up on
the period in last year.
After a dramatic downturn during the pandemic, new private office
construction activity is continuing to stage a spectacular recovery. New office
developments of all sizes have seen an upturn and the value of project starts
in the sector rose 50% in the three months to April on the previous quarter and
were up 19% on a year earlier. Project starts on large schemes - worth over
£100 million – rose almost four-fold in the three months to April.
Some significant office projects in the pipeline should help buoy up
activity in the sector, particularly in London. Tenders have been returned and
a contractor is due to be appointed in June on one landmark project in the
capital: the huge £300 million Fleet Street Development in the City of London.
This will involve some 78,456 sq m of space and 20 upper storeys on a 37-month
project due to start this coming autumn (Project ID: 21327874).
A 9% rise in the value of residential main contract awards in the three
months to April compared to the previous quarter, bodes well for firms on the
lookout for housing-related tendering opportunities. One significant housing
project in the South East where work is due to start this autumn is the £20
million Castlefield Estate regeneration project in High Wycombe involving 184
flats and 10 houses. (Project ID: 15307428).
Despite the pressure on consumer spending, structural change in the retail
sector is adding to prospects in the work pipeline. Underlying detailed
planning approvals (those under £100 million) on retail projects in the quarter
to April rose 35%, to stand 22% up on the period a year earlier.
Supermarket-related construction also remains relatively buoyant, accounting
for half of the work starting in the three months to April, worth some £226
million. Plans for one retail scheme which have been approved, the £10.9
million redevelopment of St George’s Park at Newport in the Isle of Wight,
include a supermarket, four retail units and restaurant. Work on the scheme,
involving over 6,500 sq m of space, is due to start towards the end of this
year (Project ID: 13234631).
The North East was easily the strongest performer amongst the UK regions in
the three months to April with the value of project starts up 44% on the
previous quarter and standing 3% higher than a year ago.
Some major regeneration projects in the pipeline should help to keep the
region’s construction industry busy. Demolition work has recently got underway
in preparation for the £36 million Stockton Town Urban Park & Waterfront
Development. It will involve various new mixed-use building and public realm
improvements to create 19, 235 sq m of space and work is set to start next
summer and run for 17 months (Project ID: 21142308).
Contractors in Northern Ireland also saw an upturn in the quarter to April
with project starts rising 7% on the previous three months to stand 34% up on a
year earlier.
