'High interest rates and a weak economy continue to depress the market'

There has been a “universal decline” in the construction sector in the three months to October, reports the latest Glenigan Index.

The value of underlying work starting on-site during the three months to October fell 25% against the preceding three-month period to stand 35% lower than a year ago.

Residential construction starts decreased 23% on the preceding three months and fell down by 30% in relation to the previous year, while non-residential project starts sank by 29% against the preceding three months to stand 42% down on a year ago.

Civil engineering work starting onsite decreased 18% against the preceding three months and plummeted by 36% against the previous year.

Glenigan attributes this slump to a blend of ongoing global economic pressures and persistent political uncertainty, which is continuing to hinder investor and consumer confidence.

Regional data revealed that the West Midlands experienced a particularly poor period, with the value of project starts decreasing 27% against the preceding three months, falling 43% compared the previous year.

London was also 36% down on 2022 project-start levels and 19% lower than the previous three months. 

Commenting on the results, Allan Wilen, economic director at Glenigan, said: “The November Index will make for disappointing reading as previous editions hinted that green shoots of recovery were starting to poke through.

“Frustratingly, high interest rates and a weak economy continue to depress the market, reducing the appetite to commence projects until markets stabilise.

“Many contractors and developers have been left high and dry by the recent decision to can HS2 Phase 2.

“However, the sector has faced tough times before, and we’re confident current headwinds will die down over the next few years.”

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