Glenigan’s February Index paints a bleak picture for the construction industry, revealing sharp declines in both residential and non-residential sectors
Glenigan’s February Index showed that project starts nose-dived compared to 2023 figures, plummeting by 36%.
This included residential construction which weakened 34% on the year before.
All other vertical performance was weak, with non-residential project-starts finishing 37% lower than the same period last year.
The downturn is not surpising given market conditions
Persistently high interest rates and economic uncertainty were cited as reasons for the downhill trajectory.
Glenigan’s economic director, Allan Wilen, said:“The February Index shows project-start performance remaining frustratingly slow across the sector, amid eye-watering economic conditions.
“This protracted period of depression is evident in sharp declines across the private residential, industrial, and commercial sectors. On a more positive note, civil engineering starts remain slightly more stable, posting a modest decline against the preceding three months. However, they remain sharply lower than this time last year.”
Residential construction starts decreased 16% in January
Residential construction starts decreased 16% on the preceding three-month period to stand 34% lower than a year ago.
Private housing similarly decreased 18% against the preceding three months, with starts 36% weaker than 2023 levels.
Social housing performed poorly on both counts, with work starting on-site falling 9% against the previous three months, standing 28% down on the previous year.
Non-residential construction also saw a decline
Turning to the non-residential sector, the value of project starts fell by 12% in the three months leading to January, ending up 37% lower than the figures from 2023.
Industrial projects were notably affected, weakening by 11% in the last three months and resulting in a substantial 45% decrease compared to a year ago.
Offices, education, and retail projects also experienced declines of 19%, 17%, and 18%, respectively, against the preceding three months, with larger declines of 39%, 37%, and 27% compared to the previous year.
Various other sectors, including health, community & amenity, and hotel & leisure, also saw decreases.
Regional construction analysis
Project starts showed poor performance across most areas of the UK in the three months leading to January, with the South East declining by 25%, Scotland by 30%, and Wales by 50%.
There were mixed results in the North East, with a 1% increase , but an 18% decrease year-on-year.
East Midlands increased by 42% against the preceding three months.
Northern Ireland and the West Midlands weakened by 9% and 12%, remaining 33% and 16% lower than a year ago.
Yorkshire & the Humber and the North West both experienced declines.
