Sharp rise in construction projects starting on site

  • Starts in the three months to April were 23 per cent up on both the preceding three months and a year ago
  • Firm growth in residential and non-residential project starts, with private housing, industrial and commercial particularly strong
  • A sharp rebound in civil engineering projects has also boosted overall starts

Overall the value of work starting on site in the three months to April was 23 per cent up on the same period of a year ago, according to the latest Glenigan Index. This is a marked improvement on both the preceding three months and the same period in 2015, when the flow of project starts was disrupted ahead of the General Election.

Glenigan IndexCommenting on this month’s figures, Allan Wilén, Glenigan’s Economics Director, said:

“The rise in starts during the three months to April is welcome news. It is particularly encouraging that the pick-up in project starts has been broadly based across all construction sectors, including a sharp rebound in civil engineering work.”

“Furthermore the development pipeline remains firm, despite a recent dip in planning approvals that is mainly attributable to fewer public sector projects. Overall the value of planning approvals during the 12 months to April was 3% up on the preceding period. The development pipelines for private housing, industrial and office projects are particularly strong.”

“Near term we anticipate that investor nerves may dampen the current upturn in project starts ahead of June’s EU referendum. Nevertheless we anticipate that there will be a rise in projects going out to tender over the coming months as clients’ line up work to start in the second half of the year.”

“Accordingly while the impending vote may dampen project starts in the near term, the second half of 2016 could see a sharp rise in activity as private investors press ahead with projects once the issue of EU membership has been resolved.”

The current rise in project starts has also been broadly based across the UK. Those areas worst affected by flooding and water logged ground at the turn on the year have seen the sharpest turnaround in project starts. The North East, North West, West Midlands East of England and Scotland all saw sharp increases in the value of projects starting on site during the three months to April against the preceding three months.