Rhys Gadsby, Glenigan’s Economic Analyst, commented on this month’s figures, “The recovery in work commencing on-site has lost momentum, with growth against the preceding three months now only at 3%.
“Despite a relatively positive period for the residential sectors, growth against the previous year and preceding three months was largely held back by non-residential project-starts, particularly in the hotel & leisure, offices and education sectors. The value of private non-residential starts has begun to evaporate, while at the same time publicly-funded projects have been very slow to materialize.
“Heading into the Christmas period, and with Britain’s relationship with the European Union still largely uncertain, growth is forecast to be weak over the coming months through to 2021.”
“The value of residential project-starts during the three months to November increased 1% against the previous year and climbed 30% compared to the preceding three months on a seasonally adjusted basis.
“Growth against the previous year was due to social housing starts, which were 10% higher than a year ago and the preceding three months. Private housing work commencing on-site was 2% lower than a year ago, but experienced the strongest growth against the previous three month period of any sector with an increase of 41%.
“Non-residential projects starting on-site during the three months to November declined 35% compared to a year ago and by a quarter against the preceding three months on a seasonally adjusted basis. A sharp decline in office starts of 52% against the previous year largely contributed to the decline. Office starts also declined significantly compared to the preceding three months, with the value falling 49%.
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“The biggest decline against the previous year came from the hotel & leisure sector, with a decline of 65% against the previous year. Work commencing on-site also declined by a third compared to the preceding three months.
“The industrial and retail sectors also experienced significant downturns, with industrial-starts falling by a third and retail-starts declining 43% against the previous year. While industrial work starting on-site climbed 15% compared to the preceding three months, retail-starts fell 34%.
“In contrast, despite a 7% decrease in the value of work commencing on-site against the preceding three months, health-starts increased 36% compared to the previous year. This was the greatest growth of any sector against the preceding year.
“Civil engineering work starting on-site during the three months to November increased 15% against the preceding three months (seasonally adjusted), but declined by 6% compared to a year ago. The decline against the previous year was largely due to the infrastructure sector, which witnessed a 11% fall in the value of work starting on-site. However, against the preceding three months starts climbed 4%. The utilities sector experienced a good three months to November, with the value of project-starts increasing 4% against the previous year and 37% against the preceding three month period.”
The value of project-starts in the majority of UK regions were still lower than a year ago. However, a few regions achieved growth and surpassed the previous year.
Project-starts in Northern Ireland experienced the greatest increase of 15% against the previous year. Against the preceding three months (seasonally adjusted), starts climbed 22%.
Underlying construction starts in the West Midlands increased 11% on the previous year and experienced the greatest rise against the preceding three months of 50%.
The only other region to witness an increase in the value of underlying starts was Wales, with a rise of 4% compared to a year ago and 18% against the preceding three months.
The East Midlands and North East experienced the sharpest declines compared to a year ago, with the value of underlying starts falling 49% and 39% respectively. Similarly, work commencing on-site in the East of England declined 31% against the previous year.
Despite declines against the previous year, London, Scotland and Yorkshire & the Humber experienced increases compared to the preceding three months with rises of 18%, 4% and 27% respectively.
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