Glenigan, one
of the construction industry’s leading insight and intelligence experts, has released
the April 2024 edition of its Construction Review.
The Review focuses on the three months to
the end of March 2024, covering all major (>£100m) and underlying
(<£100m) projects, with all underlying figures seasonally adjusted.
It’s a report which provides a detailed
and comprehensive analysis of year-on-year construction data, giving built
environment professionals a unique insight into sector performance over the
last 12 months.
The April Review highlights consistently
weak construction-start performance over Q.1 2024, as the industry navigates
its way through a persistent economic downturn.
Averaging £7,215 million per month, work
commencing on-site fell 3% against the preceding three months, to finish 28%
lower than the same time last year. This can be attributed to significant
decreases in both major and underlying works commencing on site.
Major project-starts fell 26% against the
preceding three months and declined by 41% compared with the previous year. It
was an equally gloomy outlook for underlying work, dropping 22% during Q.1 to
stand 21% down on the previous year.
Main contract awards also stalled,
remaining flat during the three months to March and 32% down on 2023 figures.
Detailed planning approvals also failed to
increase, falling back 18% against the preceding quarter with no movement
either way compared to last year.
Glenigan’s Economic Director, Allan Wilen
says, “Sluggish performance in Q.1 2024 is unsurprising as economic uncertainty
continues to deter private sector investment. However, there are some small
glimmers of hope to be found within some verticals, which experienced modest
growth during the Review period. Particularly education, health and community
& amenity. This indicates a small boost in the public sector pipeline
however, with a General Election approaching, any short-term improvement needs
to be considered with a degree of cautious optimism.”
The sector-specific and regional index
follows. Measuring underlying project performance, it paints an overall picture
of decline across most sector verticals.
Sector Analysis – Residential
Residential starts-on-site fell during
Q.1, dropping 27% in the three months to the end of March, standing 27% lower
than a year ago.
Private housing was also down 22% on the
preceding three months, with performance weakened by 24% compared with the
previous year.
Social housing also posted poor results,
with work commencing on-site falling 43% against the preceding three months and
plummeting by 40% against last year’s figures.
Sector Analysis –
Non-Residential
Performance in non-residential sectors was
mixed.
Community & amenity project-starts
experienced an impressive growth period, increasing by 36% against the previous
three months to stand 19% up on a year ago. A boost to the vertical was
partially delivered by a £79 million prison extension project in Shaftsbury, Dorset.
It was the only vertical to experience growth against both periods.
Health starts experienced a fall of 13%
against the preceding three months, but advanced 26% on the same period last
year. Similarly, retail project-starts declined 13% during Q.1 but enjoyed a
modest 1% lift against the previous year.
Vice-versa, education was up 3% compared
with the last quarter but down 17% on a year ago.
Industrial project-start performance was
poor, with project-starts weakening 15% during Q.1 to stand 22% lower than a
year ago. It was a similar story for hotel & leisure, with the value of
project-starts falling back 19% against the preceding three months and 15%
against the previous year. Likewise for offices, where the value of underlying
project-starts fell back 22% during Q.1 to stand 23% down on a year ago.
Civil works fared particularly poorly,
with the value of project-starts declining 34% against the preceding three
months, to stand 26% lower than a year ago. A significant driver for the
decline was poor performance in infrastructure, which remained 42% behind 2023
levels, with work starting on-site also slipping back 43% against the last
quarter. However, on a more positive note, utility starts experienced a slight
uptick against 2023, growing 2% despite falling back 21% against the preceding
three months.
Regional Performance
Northern Ireland was the
strongest-performing region in the UK, with project-starts increasing 44%
against the preceding quarter, to stand 28% up on this time last year. Here,
growth was accelerated by the £44 million development of the Hamilton Dock Hotel
in Belfast.
The outlook for the East of England was
also sunny. It was the only other region to experience growth against both
periods, up 13% on the preceding three months, as well as 25% on the previous
year. Growth in the region was supported by the commencement of a £74 million
246-unit residential development in Maldon, Essex.
London experienced a 23% decrease against
the preceding three months and remained 18% down against the previous year.
The West Midlands experienced particularly
poor performance, with the value of project-starts falling 56% against the
preceding three months and by 45% compared with the same time last year. This
was the steepest decline of any region.
Work starting on site in the East Midlands
(-49%), Wales (-33%), and Scotland (-25%) all remained distinctly behind 2023
figures.
Every other region of the UK experienced a
weakening in project-starts against both the previous quarter and the year
before.
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