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Most of UK sees activity as construction sector grows

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Most of UK sees activity as construction sector grows


Published by Max Salsbury for in Housing and also in Development

Housebuilding Housebuilding

The construction sector experienced broad growth in the three months to November with most of the UK seeing new project starts, according to the latest Glenigan Index.

The Index, which covers the value of projects starting on site from September to November this year, is up 9% compared with the same period in 2012, driven by growth across all three main sectors of the industry: civil engineering, residential and non-residential.

Civil engineering has been one of the fastest growing sectors in 2013 in terms of underlying projects starts, with the sector enjoying double digit growth since August.

This continued during the three months to November, with starts 28% higher than a year ago. Growth has been driven by a 61% rise in utilities projects, while infrastructure projects were slightly up on 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 and provides an indicator of developing activity in the industry.

Allan Wilén, economics director at Glenigan, said: "Private sector growth is key to a sustained recovery in construction activity, with double digit growth forecast for the office, industrial, retail and hotel and leisure sectors.

"Last month's Index indicated that private non-residential construction has already begun to pick up alongside improvements in business sentiment. The economic brightening has continued and recent figures show an improvement in business lending."

Project starts in non-residential sectors that are more dependent on public funding increased during the three months to November, with education starts up by 15% and health starts by 3% year on year.

"Low levels of government spending will be less of a drag on growth of overall non-residential activity than in recent years," Mr Wilén said.

"Starts of health projects are expected to continue a long term trend of decline; however this will be offset by a large increase in funding for school renovation and new build projects through the Priority Schools Building Programme."

Starts of residential projects increased in the three months to November, up by 5% in value compared to the same three months of 2012. The growth was driven by a strong upturn in starts of social housing projects rather than private housing starts.

Starts have grown strongly in Northern Ireland during the three months to November - over double the value of a year ago and the highest level since May 2011.

There was also a marked improvement in starts in Yorkshire & the Humber after the drop in starts seen during the third quarter.
The North East, East of England and Wales were the only parts of the country to see a drop in project starts against the same three months a year ago.

Mr Wilén added: "The results of this month's Glenigan Index are a further indication that the construction recovery is spreading beyond the housing market, and London and the South East.

"Every UK region is forecast to see an increase in project starts during the first quarter of 2014."provider's 12,000 new homes by 2020 target.


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