Construction growth up, but housing starts down according to Glenigan
According to industry analysts Glenigan, construction growth in February was up 10% despite the economic disruption caused by the bad weather. The growth was due to rapid expansion in the office sector.
Projects starts were up by more than 50 % compared to last year, and by infrastructure, which saw starts up 64% on last year.
Hotel and leisure sector:
The hotel and leisure sector has seen a returned growth with starts up by more than 20%.
- Projects reliant on public money saw declining figures.
- Starts of health projects fell by 43 % compared to a year ago, following a 10 % fall during 2013 as a whole.
- Education projects also slowed, despite growth during 2013.
Residential and housing:
- Residential work saw a decline, dropping 2% overall.
- Private housing growth slowed to 5 %.
- The number of social housing projects starting dropped by 15% due to flooding disrupting projects builds.
Construction increase in flooded areas later in this year:
Widespread flooding and disruption had a negative impact on the economy due to business closures and disruption across transport networks, causing delays to site openings. The floods are expected to cause a rise in construction work later in the year when repair work is undertaken.
Private sector investment is the main driver:
Commenting on the figures, Allan Wilén, economics director at Glenigan, said: ‘Private sector investment is the main driver behind the latest 10 % rise in construction project starts. Glenigan has recorded growth in the commercial and industrial property sectors that will feed through as higher industry workload during 2014 and 2015. Civil engineering also remains a hot spot, due to increases in infrastructure and utilities work.’
He added: ‘In contrast, the strong growth in housing project starts seen during 2013 lost momentum over the three months to February. Longer term recent events will generate additional repair work to flooded homes and business premises as well increased investment in flood defences.’
Image: Glenigan index figures – February 2014
Source: Architects Journal as reported on 4 March, 2014