Project Starts Steady as Post-Lockdown Backlog Clears, but Starts Still 36% Down on Q3 Last Year, According to Glenigan Index

• The value of work commencing on-site during the three months to September was 36% lower than a year ago, but climbed 16% against the preceding quarter on a seasonally adjusted basis.

• Residential starts climbed 40% on the preceding quarter (seasonally adjusted), but were still 38% lower than the previous year.

• Despite a fall of 35% compared to a year ago, the value of non-residential work starting on-site increased 8% on the preceding quarter on a seasonally adjusted basis.

• Civil engineering starts during the three months to September were 34% down on a year ago and 9% lower than the preceding quarter (seasonally adjusted).

Rhys Gadsby, Glenigan‘s Economic Analyst, commented on this month’s figures, “Despite the value of starts in September slipping back 4% on August, the third quarter of 2020 experienced a marked recovery in the value of work commencing on-site in all sectors and regions against the lows of the previous quarter.

“However, project-starts are still heavily down on pre-pandemic levels. The latest Glenigan Index shows a 36% fall in the value of project-starts during the third quarter against a year ago, and as the initial backlog of delayed project-starts has now cleared, we anticipate that growth will be slow over the coming months through to 2021.”

Sector performance

“The value of residential work during the three months to September declined 38% against the previous year, but was 40% up on the preceding quarter (seasonally adjusted).

Private housing work starting on-site bounced-back the fastest, with the value of work rising 43% on the preceding quarter on a seasonally adjusted basis. Despite this, starts were still 40% lower than a year ago.

“Social housing starts experienced a similar recovery against the preceding quarter, rising 32% on a seasonally adjusted basis. However, against the previous year, starts declined by a third.

“Although the value of non-residential projects commencing on-site was 35% lower than a year ago, starts climbed 8% on the preceding quarter on a seasonally adjusted basis.

“The health sector experienced the biggest increase in the value of starts against the previous year, rising 23%. Starts also increased by 92% on the preceding quarter (seasonally adjusted).

“Retail starts increased convincingly against the preceding quarter (seasonally adjusted), rising 61%, and 6% against a year ago.

“Office starts during the three months to September also experienced a strong recovery against the preceding quarter, with the value of work commencing on-site increasing by a fifth (seasonally adjusted). Despite this, starts were still 27% lower compared to a year earlier.

“The hotel & leisure sector experienced a significant fall with the value of starts decreasing 72% against the previous year, and 52% compared to the preceding quarter (seasonally adjusted).

“Industrial starts also suffered during the period, with the value of work commencing on-site dropping 45% on a year ago, and 7% on the preceding quarter on a seasonally adjusted basis.

“The value of civil engineering starts (less than £100 million) during the three months to September slipped back 9% on the preceding three months on a seasonally adjusted basis, and declined 34% against the previous year.

“Utilities project-starts climbed 19% against the preceding quarter (seasonally adjusted), although they were 41% lower than a year ago. “Infrastructure work declined 22% against the preceding quarter on a seasonally adjusted basis, and slipped back 30% on the previous year.”

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details of its various media channels and events, together with access to our downloadable database of those with responsibility for procurement at key firms.

Gradual recovery among UK regions continues

“While most regions experienced a recovery against the low-points of lockdown, all regions were still down on the previous year.

“The value of starts in Northern Ireland and the South West experienced the smallest declines, with falls of 4% and 9% on the previous year respectively.

“The steepest declines in the value of work starting on-site compared to the previous year were experienced in the East Midlands (-58%), West Midlands (-51%) and Yorkshire & the Humber (-49%).

“Against the preceding quarter on a seasonally adjusted basis, many regions experienced a strong bounce-back in the value of starts. In particular, Scotland and the South West experienced strong recoveries, with the value of work commencing on-site increasing 101% and 55% respectively.

“London and the East of England also experienced an increase in the value of work starting on-site compared to the previous quarter, with starts rising 31% and 28% respectively on a seasonally adjusted basis.

“The West Midlands and Wales saw the value of starts fall the sharpest against the preceding three months (seasonally adjusted), with work commencing on-site slipping back 44% and 37% respectively.”

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