Glenigan analysis reveals precipitous decline in new schemes this autumn

The value of major projects starting in the three months to November fell by 75% compared to the three preceding months, according to new analysis of industry trends.

Glenigan’s December construction review found that smaller projects, worth £100m or less, also slumped by 22% in the period.

Overall, the value of projects starting on-site averaged £4,727 per month, a 43% drop against the preceding three months and 21% lower than a year ago.


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Work starting on major projects has stalled since the autumn, Glenigan said

The figures are in line with recent ONS data which showed a 1.8% drop in construction output in October this year, the largest monthly decline since April 2020. 

But the review also provided hope for a resurgence next year, with the value of main contract awards up by nearly half, 46%, on a year ago.

The value of major contract awards were also some 75% higher than a year ago, despite dropping by 25% in the three months to the end of November.

Smaller project awards have been less volatile, with values edging up by 2% in the three months to the end of November to stand at 38% above a year ago.

The value of planning consents, despite a 10% jump in the three months to the end of November, are down by 7% on a year ago and 14% on pre-covid levels.

However, the number of major and smaller consents rose by 19% and 13% respectively during the three-month period.

Glenigan economic director Allan Wilen said that Omicron, the new covid-19 variant, had made the industry’s woes worse but that he expects a brighter picture in 2022.

He said: “Whilst, right now, it might seem we are in perpetual decline, with average project starts continuing to decrease across the UK, I urge readers to appreciate the wider context.

“Supply chain issues continue to bite and the winter months usually bring delays, weather-caused or otherwise, to work on-site, the new Omicron strain has only exacerbated the situation. 

“Looking forward, the encouraging contract awards and planning approvals figures highlight recovery is on the horizon with a stable pipeline of projects anticipated in 2022 and beyond.”

In terms of sectors, residential starts were down by 17% on the previous three months and 35% lower than a year ago.

Social housing starts dipped by 7% to stand 30% lower than a year ago, while private housing fell by more than a fifth, 21%, during the last three months.

Health projects have had a particularly bad autumn, with starts falling by 20% during the three-month period and landing at 40% below a year ago.

But the trend was bucked by industrial project starts, which rose by 11% and were 22% higher than a year ago at the end of November.

Regionally, the figures were mixed. The East Midlands saw starts increase by 7% during the autumn, while there was a 10% rise in Northern Ireland.

In London, starts were up by 2% but still 8% lower than a year ago. The North-east saw a 4% rise but was still nearly a fifth down on a year ago.

Scotland has produced the worst figures, with project start values plunging by 48% during the autumn, down 58% on a year ago.

Meanwhile, year-on-year start values also dropped significantly in Wales at -51%, East of England at -25%, North West art -22%, South-east at -24% and the West Midlands at -26%.