Housing and supermarkets lead recovery

Grant Prior 14 years ago

Residential schemes and supermarket developments led the private-sector recovery as construction starts rose 10.5% during the first quarter of this year.

The value of supermarket work was double that of a year ago and private housing project starts were 41% up on the same period in 2009.

Experts at Glenigan are now hoping the private sector recovery will offset the anticipated cuts in public sector work. The firm’s figures track all projects under £100m.

Economics director Allan Wilen said: “The construction industry will be looking to a continued rise in private sector work over the coming months with public sector expenditure cuts looming.”

Continued weakness in the industrial and office sectors was partially offset by hotel and Olympic related schemes.

Additionally, the underlying value of health and education projects increased compared to a relatively weak period in the three months to April 2009 despite a slowing in government funded projects.

Civil engineering project starts re-bounded following a weak start to 2010. The Glenigan Civil Engineering Index was down four per cent in April 2010, compared to 36%  and 24% in February and March 2010 respectively.

Wilen said “Civil engineering was boosted by an increase in utility projects, however growth was tempered by fewer road and rail projects.”

Regionally, project starts increased considerably in the Midlands and North East. Northern Ireland, the south west and south east of England were the only regions to record a fall in project starts against the same period a year ago.

Looking ahead Mr Wilen said: “A further strengthening is anticipated over the forecast period (to Q2 2012). Weak industrial and office sectors will remain a drag on project starts over the next few months, however conditions in the industrial and commercial property markets have moved off the low point reached in the first half of 2009.

“We can see that housebuilders are keen to capitalise in recent improvements in market conditions, although weak household earning and consumer confidence combined with limited mortgage availability will restrict the pace of recovery in new house sales and project starts during the remainder of 2010.”

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