Non-Residential Growth Balances Construction Slowdown, According to Glenigan Index

Glenigan, one of the construction industry’s leading insight experts, has released the December 2024 edition of its Construction Index.

The Index focuses on the three months to the end of November 2024, covering all underlying projects with a total value of £100m or less (unless otherwise indicated, with all figures seasonally adjusted).

It’s a report that provides a detailed and comprehensive analysis of year-on-year construction data, giving built environment professionals a unique insight into sector performance over the past 12 months.

The December Index shows construction activity avoiding a slide back into decline, with project-starts holding steady in the three months to the end of November. This gradual rebound reflects the findings of Glenigan’s autumn Forecast, which registered a modest performance dip in 2024 before a return to double-digit growth next year.

Commenting on the findings, Glenigan’s Economic Director, Allan Wilen says, “The much-anticipated boost from a switch in Government in July has yet to fully materialise, leaving many in the industry still waiting for a turnaround. While a weak period for residential construction starts weighed on overall performance, strong growth in the non-residential sector, fuelled by improved confidence, helped to stabilise starts. Notably, the Education and Hotel & Leisure sectors delivered standout performances, serving as key drivers of overall construction project starts.

“Despite current, sluggish conditions, our data forecasts a return to growth from 2025, offering the industry brighter horizons and renewed optimism as the new year approaches.”

Taking a closer look at the sector verticals and UK regions…

Sector Analysis – Residential

The overall value of residential project-starts weakened during the Index period, falling 1% against the preceding quarter. The value also stood 6% lower than the previous year.

Private housing stumbled on its strong performance in recent iterations of the Index, with work starting on-site declining 3% compared to the preceding three months, and 1% on 2023 levels.

Social housing starts bucked the trend, increasing 4% on the preceding three-month period. However, it performed poorly compared to the previous year, slipping back 20%.

Sector Analysis – Non-Residential

Overall, non-residential performance rallied during the Index period, with starts up against both the previous quarter and last year.

Hotel & Leisure experienced a strong period, with starts increasing 37% against the preceding three months to finish a staggering 71% up on the same time a year ago.

Education project-starts also grew, rising 31% against the preceding three months and increasing 29% against the previous year.

Offices had a good period, with the value of underlying project-starts increasing 24% against the preceding three months, standing 2% up on a year ago.

On the other hand, industrial project-start performance was dismal, suffering a 22% fall during the three months to November to stand 4% lower than a year ago. Community & amenity also fared poorly, with the value of project-starts falling back 14% against the preceding three months and 15% against the previous year.

Civils growth was poor, with starts decreasing 17% against the preceding three months and remaining flat against the year before. This was boosted slightly by infrastructure activity, with starts increasing by 1% against the preceding three months and by 36% on a year ago.

Utilities starts didn’t fare as well, declining 41% against the preceding three months to stand 34% down against the previous year.

Regional Analysis

Regional performance was mixed, with the North East the stand-out performer during the three months to November.

Starts in the North East increased 32% against the preceding three months. Despite this, starts failed to match 2023 levels, remaining a fifth behind.

London also offered a faint bright spot, with project-starts performing relatively well compared to the majority of the UK, increasing 11% against the preceding three months and 2% above the previous year.

The South East experienced a similar trend, advancing 3% against the preceding three months to stand 14% up on the year before.

Some areas of the UK fared less well, including Wales where the value of project-starts fell 30% against the preceding three months to stand a whopping 34% down on a year ago. This was also the case in Yorkshire & the Humber which crashed compared to the preceding three months and the previous year.

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