Housing suffers election hangover

// HA News

UK construction continues to feel the impact of the general election as activity drops for the second consecutive month, according to figures released today by industry analysts Glenigan.

The Glenigan Index for June, which covers the value of projects starting on site during the previous three months, has declined by 10% as activity stalled in the run up to polling day.


Civil engineering and non-residential work fell by 21%, with further declines in the retail, office and industrial sectors. Following last month's strong performance, hotel and leisure starts have now also fallen into the red, down 20% on a year ago.


By contrast, the Glenigan Residential Index is up 9%, with value of schemes started by private housebuilders 14% higher than a year earlier - the fastest expansion since July 2014.


Social housing starts were also up on a year earlier, with the sector seeing a modest upturn in recent months after weakening during 2014.


Commenting on the figures, Allan Wilén, Economics Director at Glenigan, said "Despite the recent slowdown in project starts, our data indicates that activity will bounce back quickly over the next couple of months.


"The value of contracts awarded has continued to grow during 2015 and developers will now be mobilising their project teams.


"We expect this to come to fruition with a surge in starts during the second half of the year."
Elsewhere in this month's Index, the public sector experienced differing fortunes, with declining non-residential work driven by a 20% fall in education starts as universities continue to postpone schemes. 


In contrast, the health sector saw starts increase by 20%, even excluding major projects including Papworth Hospital in Cambridge and the New Dumfries and Galloway Royal, both funded through variations of Private Finance Initiative models.


The regional picture reveals continued contraction, with only the East Midlands escaping the slowdown. London and the South East saw only modest declines, as did the North West and North East of England. However other parts of Northern England, the West Midlands and Wales all saw sharp falls relative to a year ago.


The monthly Glenigan Index is based on extensive research of every construction project starting in the UK over the previous three-month period, providing an indicator of developing activity and future output in the industry.

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