The rate of decline in UK construction performance continues to soften, with the value of underlying work starting on site falling 13% in the three months to May, finishing 16% lower than a year ago
The June 2024 Glenigan Index focuses on construction performance in the three months to the end of May 2024, covering all underlying projects, with a total value of £100m or less (unless otherwise indicated), with all findings seasonally adjusted.
The June Index reveals that overall sector decline is gradually levelling out and that, whilst undoubtedly lower than 2023 figures, equilibrium is returning in line with a slowly stabilising economy.
The rate of decline stayed in the early-to-mid teens as it had in May, whilst hotel and leisure saw a rise of almost a quarter.
Residential construction was generally lacklustre
Private housing performance fell 23% compared to the previous year, and 15% against the previous three months to May.
On the other hand, social housing, having consistently posted poor results, experienced a small reversal in fortunes, jumping 1% compared to the preceding three months. However, this little increase wasn’t enough to stop it from finishing 16% lower than 2023 levels.
Overall, residential starts decreased 11% on the preceding three months and were down 21% on 2023 figures.
Non-residential performance was more mixed
Health, Industrial and Infrastructure all experience poor performance.
Despite a 6% increase on 2023 levels in infrastructure, a 25% decrease in the three months to May meant it wasn’t enough to turn the tides on a particularly poor outing for Civils work, which plummeted 41% during the Index period to finish 9% down on last year.
Especially lacklustre performance in Utilities starts will have made a massive contribution to these figures, with starts down over the last three months slashed in half (-50%), and almost a third (-31%) lower than in 2023.
However, Hotel and Leisure rose 39% against the preceding three months and 23% up on the previous year.
Education also returned a strong set of results, with the value of starts increasing 14% on 2023 levels, up an impressive 35% on the previous three months.
Yorkshire & the Humber took the top spot this month
With starts increasing an impressive 35% against the preceding three months, up 34% above the previous year, Yorkshire & the Humber sat comfortable at the top of the regional tables.
Northern Ireland came in second, with starts increasing 22% against the preceding three months to finish 5% up on the previous year.
Elsewhere, construction performance was weak
There were mixed blessings with the value of starts in the South West increasing 28% against the preceding three months, but declining 1% against the previous year. Vice-versa, the North West decreased 5% against the preceding three months, finishing 1% up on the previous year.
London experienced a 30% decrease against the preceding three months and was 25% down against the previous year. The value of starts in the South East decreased 25% compared with the preceding three months and declined by 25% against the previous year. The West Midlands experienced a 5% decrease against the preceding three months to stand 7% down on the previous year.
Starts also fell consistently in the East of England, East Midlands, Scotland, and Wales in both the Index period and compared to 2023 levels.
The industry is holding its breath for the coming election
Glenigan’s economist, Drilon Baca, said, “Return to a period of relative stability will be welcomed across the sector.
“However, with a General Election exactly a month away, we need to approach these figures with an element of caution. Whatever the results it will have a considerable effect on industry behaviour, particularly in the private sector, either prompting a spurt of activity or a resumption of the pausing and delays commonplace over the past 24 months.
“In the public sphere, much will depend on the policies announced in respective manifestos and what the victorious party, or parties in a Hung Parliament, choose to prioritise.”
