Glenigan, Powered by Hubexo (Glenigan), one of the
construction industry’s leading insight experts, releases the January 2025
edition of its Construction Index.
The Index focuses on the three months to
the end of December 2024, covering all underlying projects, with a total value
of £100m or less (unless otherwise indicated), with all 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.
This year commences on a more positive note.
Despite appearing that the value of project-starts declined during the final
three months of the year it actually rose 2% compared to Q.3, when seasonally
adjusted.
Encouragingly, some verticals also
rallied, especially private residential construction, which contributed to 7%
overall residential sector increase in Q.4. In the non-residential sector,
continued strong performance in Hotel & Leisure and a handful of other
verticals were integral to overall growth of 3%.
Commenting on the outlook at the start of
the year, Glenigan’s Economic Director, Allan Wilen, says, “As expected,
seasonal factors affected work commencing on-site during the final quarter of
the year. However, after adjusting for the Christmas wind-down, starts managed
to edge slightly higher during these three months. This was partly driven by a
9% rise in private housing projects, indicating that developers may be entering
the New Year with renewed confidence.
“Declines in civil engineering and
infrastructure starts, which weakened in Q.4, indicate a degree of uncertainty
persists regarding public sector funding. The Government’s Spring Spending
Review is hotly anticipated, and many are waiting on updates for a number of
major projects name-checked in the Autumn Budget Statement, as part of a wider
package promised to kick-start construction activity.”
Sector Analysis – Residential
Residential construction starts increased
7% during Q.4 2024 but stood 3% lower than a year ago.
Private housing increased 9% against the
preceding three months, starts were also 1% above 2023 levels.
Social housing performed poorly on both
counts, with work starting on-site falling 1% against the preceding quarter,
standing 17% down on the previous year.
Sector Analysis –
Non-Residential
Non-residential vertical performance was
mixed, despite posting overall growth against both periods.
Hotel & leisure continued
rise, increasing 2% against the preceding three months to stand 30% up on the
previous year.
Education project-starts also
experienced a strong period, increasing 12% during Q.4 2024 to stand 22% higher
than a year ago.
Industrial sector starts also had a
positive Q.4, growing 8% against the preceding three months, and 30% against
the previous year.
Office project-start performance was
mixed, increasing 14% during Q.4 2024, yet finishing 28% lower than a year ago.
Performance was poor across all other
verticals, with community & amenity project-starts plummeting 23% against
the preceding three months. Starts also tumbled 19% compared to the previous
year.
Civils performance slumped by 29% in Q.4
2024, to sit 20% lower than a year ago. This can predominantly be attributed to
a crash in utilities starts, which fell 50% against the preceding three months
and 45% against the preceding three months. Infrastructure work decreased 10%
against the preceding quarter but grew 5% compared with the previous year.
Regional Analysis
Regional performance was also mixed. The
North East stood out, with project-starts increasing 88% during Q.4 to finish
5% up against the previous year.
The South East also experienced relatively
strong growth, increasing by 11% against the preceding three months to finish
46% above 2023 levels.
The North West and Yorkshire both
performed well against the previous quarter, with the value of starts
increasing 27% and 11% during Q.4 2024. However, performance in both regions
declined 5% against the previous year.
London experienced poor performance, with
the value of starts decreasing 13% against the preceding three months and
remaining 35% down against last year.
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