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Construction starts wane in Q3



Construction has faltered in recent months with the value of UK construction starts falling 3% over the third quarter from the preceding period.


In a statistical update from Glenigan, residential starts fell by 2% over this period in comparison to the second quarter.

Though this decline was less than that seen in other sectors (non-residential project starts fell by 8% over the same period), this has left residential construction activity 9% lower than the same point in 2023.

The decline in residential construction was predominantly led by weakness in social housing, where projects’ starts fell by 12% compared to the preceding quarter. This activity is now down 24% compared to the same point in 2023.

Private housing construction starts actually rose by 2% in the third quarter but are down 3% on a year-for-year basis.

Regionally, construction suffered throughout the UK. The North East and Wales recorded the greatest falls in project starts, with declines of 44% and 36% respectively. Both regions’ activity are now down 39% and 47%, respectively, from 2023.

Construction in London also faltered but to a lesser degree. Over the third quarter, construction starts declined 9% and are now down 26% from the previous year.

There were bright spots however. Project starts in the south west were actually up 14% over the third quarter, and 8% in the East of England.

“Many will be disappointed that the hopes of revival, often heralded by the election of a new government, have not yet come to fruition,” said Allan Wilen, economic director at Glenigan.
 
“Confidence remains low in the private sector, not helped by the prospect of the upcoming Autumn Budget Statement, which many see sweeping changes to tax and planning policy. Investors are, understandably, cautious. Likewise, a lack of clarity on public sector spending has also pushed back project start dates and left some up in the air altogether.”

As such, Allan said the Autumn Budget at the end of October will be even more closely-watched by the construction industry.

“It makes an uncertain situation even more precarious, and the sector is in a delicate position, highlighted by the collapse of ISG and its subsidiaries last month,” he added.



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