The latest Glenigan report on construction starts has found that hotel, leisure and education projects grew by 9%- a tenth higher than this time last year
Glenigan’s December 2024 Construction Index focuses on the three months to the end of November 2024, covering all underlying projects with a total value of £100m or less (unless otherwise indicated, with all figures seasonally adjusted).
The December Index shows muted promise for 2025, with project starts keeping steady in the three months to the end of November. This aligns with Glenigan’s autumn forecast, which predicted a return to double-digit growth after 2024’s slightly deflated numbers.
The North East was the strongest performer in the regional analysis
Despite starts failing to match 2023 levels(staying a fifth behind), construction project starts in the North East increased 32% against the preceding three months.
London increased project starts by 11% against the prior three months and 2% above 2023. The South East also advanced 3% on the preceding three months and 14% on the year before.
However, Wales and Yorkshire & the Humber both experienced severe declines. Project starts in Wales fell 30% on the last three months and 34% down on last year. Yorkshire & the Humber experienced similar drastic lows.
Residential project starts were muted
A 4% increase in social housing project starts in the last three months was countered by a 20% decline from the previous year’s figures.
Private housing also backslid slightly, with work starting on-site dropping by 3% in the last three months and 1% on 2023’s levels.
Overall, residential project starts were weaker over the three month period, with 1% on the preceding quarter and 6% lower than last year.
But non-residential works rallied
Project starts increased both in the previous three months and last year, with Hotels & Leisure surging 37% over the quarter to gain a 71% increase over last year’s figures.
Education project starts also benefited from a 31% increase over the last three months and a 29% boost in rates from 2023.
Office starts increased by almost a quarter over the last three months and by 2% compared to last year’s figures.
However, utilities, civils, and industrial projects all suffered a severe beating.
Utilities declined 41% over the last quarter and ended the year 34% on annual numbers. Civils growth was flat against last year and fell by 17% over the preceding three months. Community and amenity declined by 14% on both measures.
Forecasting a brighter 2025 for UK construction starts
Commenting on the findings, Glenigan’s economic director Allan Wilen said, “The much-anticipated boost from a switch in Government in July has yet to fully materialise, leaving many in the industry still waiting for a turnaround. While a weak period for residential construction starts weighed on overall performance, strong growth in the non-residential sector, fuelled by improved confidence, helped to stabilise starts. Notably, the Education and Hotel & Leisure sectors delivered standout performances, serving as key drivers of overall construction project starts.
“Despite current, sluggish conditions, our data forecasts a return to growth from 2025, offering the industry brighter horizons and renewed optimism as the new year approaches.”
