Construction starts in the residential sector have plummeted as the sector battles a sluggish economy, Glenigan’s latest industry review shows.
The Index focuses on the three months to the end of March 2024, covering all underlying projects, with a total value of £100m or less (unless otherwise indicated), with all figures seasonally adjusted.
The April Index paints a decidedly gloomy picture, in line with the persistent decline across the construction sector. Again, project-starts are down against the previous Index period and the previous year.
Ongoing pressure on household budgets, coupled with economic uncertainty, continues to negatively affect consumer confidence. This has led to unease among investors, significantly delaying project-starts across the UK, as they wait for stability to return.
Against this backdrop of socio-political disruption and a looming general election, starts remain significantly lower than last year for a third consecutive month. The situation is unlikely to change in the short-term, as the industry struggles to get back on its feet whilst being continuously battered by harsh headwinds.
Sector Analysis – Residential
Residential construction experienced overall decline in the three months to March as starts fell 27% against both the preceding period and 2023 figures.
Continuing on a downward trajectory, social housing performance was particularly weak, with starts down 43% against the preceding three months and 40% compared with the previous year.
Private housing also dropped back, with work starting on site falling 22% against the previous three-month period and plummeted 24% on 2023 levels.
Glenigan economist, Drilon Baca, said: “Unsurprisingly, our latest data shows project-starts remain low, with continued economic uncertainty leading to market stagnation, prolonging delays across the industry. Like the March Index, we haven’t seen the traditional ‘spring uptick’ boost starts this month. Investor confidence is at an all-time low, resulting in a general reluctance to move projects to site. The situation is likely to persist until the autumn when a new Government is in place and conducts a long-anticipated spending review.
“However it’s not all doom and gloom, there are some glimmers of hope on the horizon, with a number of non-residential verticals showing signs of improvement, including Community & Amenity, retail, and health, all of which were up on last year. Regionally, Northern Ireland was the standout area, posting growth against both periods.
