Flow of projects hits post-election slowdown

Aaron Morby 12 years ago
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The flow of construction projects has slowed in the immediate aftermath of the General Election.

The South East was hardest hit by the slowdown, while Scotland and the north enjoyed a rise, according to research by construction information specialist Glenigan.

Overall fewer public sector projects by value and a drop in private housing schemes on site during May offset the patchy regional gains.

Glenigan economist Allan Wilen said: “The construction industry will be looking to the private sector as government funded schemes come under increasing pressure in the coming months.”

He added: “There has been a sharp divergence in project starts over recent months, with Scotland, Wales and the north of England enjoying a sharp rise in project starts compared to a year ago.

“In contrast, the flow of project starts has been at best flat in the south of England,” added Wilen.

The Glenigan Index for May was down on the previous two months although it remains 10.3% up on a year ago.

Nationally, private housing project starts during the three months to May remained 58% up on a year ago.

But the dip in market activity in May highlighted that the pace of recovery remains weak and fragile.

Poor household earnings growth and rising unemployment, combined with limited mortgage availability are expected to restrict the pace of recovery in new house sales and project starts during the remainder of 2010.

The strength of the downturn in office, industrial and publicly funded projects was mitigated by investment by the major supermarket chains and a clutch of hotel and Olympic related schemes.

The Civil Engineering Index during May was 11% up on a year ago, after a weak start to the year. The Index was boosted by a marked increase in new utility projects, such as wind farms and power lines.

But, growth was tempered by fewer road and rail projects, which left the value of underlying infrastructure projects 25% down during the three months to May against a year ago.

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