Glenigan reports ‘signs of recovery’ as project start numbers increase

Project starts increased by almost a tenth in the three months to May, according to Glenigan.

The construction industry analyst’s June Construction Review reported a 9% increase in underlying starts over the period.

The rise comes on the back of a strong pipeline of planning approvals and contract awards, which has been building up over the past year.

The three months to May also saw a 13% rise in detailed planning approvals against the previous three months, although main contract awards were down 18% against the previous year.

Glenigan’s economic director Allan Wilen said the uptick pointed to “promising signs of recovery” for construction, as the sector “continues to reap the rewards of a strong development pipeline of contract awards built up since the pandemic”.

While underlying project starts were up, the overall value of work commencing fell 5% to £6.54bn – a full 22% lower than the same three months in 2021.

Project starts worth more than £100m accounted for much of this decline, dropping 32% against the previous three months and 31% against the same period last year. Major contract awards also fell year-on-year by a steep 49%.

In the residential sector, project starts rose 24% against the preceding three months, largely driven by private housing (+45%).

But the value of both overall residential (-24%) and private housing (-23%) projects starts was down on the previous year nonetheless.

Social housing starts performed poorly – 32% down year on year – as did much of the non-residential sector, where office project starts fared the best, up 27% during the three months to May.

Retail (1%) and health (8%) registered modest growth on the preceding three months but failed to improve on the previous year – retail declining a full 17%.

Civil engineering was down 25% on last year and 5% on the preceding three months, largely due to a fall in utilities project starts, while infrastructure was down 24% and 6% respectively.

After a strong start to the year, project starts in hotel and leisure dropped precipitously in the three months to May, plummeting 30%.

The South-east posted the strongest regional results – with project starts valued at 30% higher than the previous three months, despite being 2% below 2021 output levels.

Wales and the South-west also performed well, while the North-east faltered on its strong start to the year, project starts falling 18% against the preceding months.