Private housing starts dive by more than £1bn

Grant Prior 12 years ago
Share

The value of private housing projects starting on site dived by more than £1bn during the second quarter of this year according to alarming new figures from industry analysts Glenigan.

Construction started on 1,950 schemes worth £1.4bn between May and July compared to 2,450 projects with a value of £2.5bn during the previous quarter.

The fall spells an end to six months of growth in the private housing sector which is seen as one of the main hopes for pulling the industry out of the doldrums.

Glenigan economist James Abraham said: “Private housing had been a source of optimism as returning private sector confidence encouraged developers to invest in new work. The dip in the last three months highlights the fragility of the recovery.

“The latest Glenigan data comes fast on the heels of the sharp 9% jump in second quarter construction output recorded by ONS. ”

“Second quarter output has been buoyed by the earlier rise in project starts and industry efforts to make up time lost to bad weather at the start of the year.

“The weakening in new project starts over the last three months points to an easing in construction output growth during the second half of this year.”

The experts believe the drop is a temporary blip and private work levels will pick-up again towards the end of the year.

Abraham said: “While the decline in starts is not expected to continue to the end of 2010, the slowdown has diminished overall construction prospects”

Social housing has seen sharp falls and the outlook is gloomier for the public side of the market.

Abraham said: “New social housing projects have fallen sharply, with the three months to July over 40% down on a year ago.

“The shrinking pool of new work comes as the increase in government funds during the last financial year dry up. A recovery is not expected for the sector within the next two years.”

The value of non-residential construction project starts also fell. Despite a return to growth in retail construction, the Glenigan Non-Residential Index for July is 14% down on a year ago.

Abraham said: “Office and industrial project starts remain weak while community & amenity, health and education have suffered from government cuts”.

Civil engineering continues to be the industry bright spot with the Glenigan Civil Engineering Index for July 19% up on a year ago.

While the growth rate in the underlying value of utility projects fell, infrastructure project starts increased by a third.

Abraham said: “In particular growth was boosted by two railway projects in the South East of England with a combined value of £160m that started on site in June”.

Overall, the value of construction projects starting on site in the three months to July was 12% down on a year ago.

Looking ahead Abraham said: “The outcome of the comprehensive spending review will weigh heavily on public sector starts over the next two years.

“Despite the good flow of retail and hotel projects over the past few months, private non-residential activity has been a disappointment. Improved business confidence and lending conditions have been slow to lift industrial and office starts.

“Nevertheless, a number of stalled schemes are once again being taken forward and an increase in project starts is expected by the end of the year.”

Latest news

Administrator details confirmed at Southampton M&E firm

Begbies Traynor now in charge at Working Environments as suppliers face large losses
9 hours ago

Applicant numbers nosedive for construction vacancies

Recruitment market gets even more competitive - how the Enquirer can help
13 hours ago

Housing association shuts in-house modular factories

Swan closes loss-making steel frame and cross-laminate timber factories
16 hours ago

350-homes approved around iconic London Tube station

Housing blocks to be built around Grade II-listed Hounslow West Tube station
15 hours ago

Domis set for £195m Boddingtons Brewery scheme

Developer Salboy buys Manchester site to kickstart long-awaited 556 homes project
17 hours ago

John Lewis £500m funding deal to build 1,000 rental homes

Deal to advance BTR flats at store sites in Bromley, West Ealing and Reading
1 day ago

Esh launches new housing retrofit division

Esh Retrofit Solutions will target market to improve the energy performance of social rented homes
17 hours ago

Eric Wright wins tricky £52m Liverpool transformation

Contractor working with engineers at Ridge and Partners on "challenging" Stanley Lock Flight site
3 days ago

Investment giant buys Bristol M&E contractor

RDCP Infrastructure acquires Avon Combined Electrical Services
4 days ago

Demolition start for £50m Farnworth town centre rebuild

Caddick Construction is tipped for main works due to start in the spring
4 days ago

L&G Modular strikes deal to build 1,000 affordable homes

Modular homes business teams up with Hampshire's Vivid housing association
4 days ago

Former Erith operations director joins John F Hunt

Scott Exell named new operations director at demolition specialist John F Hunt
4 days ago

Green light for £135m Leeds twin tower resi scheme

Construction to start in New Year on 500 build-to-rent apartments
4 days ago

Mace hits 1m tonnes carbon saving target for clients

Present work pipeline betters 2026 carbon emission saving target
4 days ago

Plans in for £40m surf park at former Kent colliery

Seahive surf lagoon and health resort will be built near Deal
5 days ago

Crushed demolition worker vows to return to industry

Shannon Brasier hoping to return to construction following horror accident
5 days ago

Mount Anvil to start 900-home North London estate rebuild

Planning approval paves way for Barnsbury Estate rebuild in Islington
5 days ago

Green light for major laboratory campus in Cambridge

Developer BioMed to tender first building on 600,000 sq ft lab complex in the New Year
5 days ago

Belfast firm signs the biggest work deal yet under Project Gigabit

Fibrus to hook-up rural Cumbria to lightning-fast broadband under £108m deal
5 days ago

McLaren wins Leeds logistics park contract

Work to start imminently on warehouse complex for Firethorn Trust
5 days ago

Work restarts on £683m waste power plant after site death

Construction suspended for a week of investigations following fatality
5 days ago

Demolition starts on £135m Wigan Galleries scheme

Contractor BCEGI starts work on project to redevelop Wigan town centre
6 days ago

Amey CEO to step down following private equity buyout

Amanda Fisher to leave once business is transferred to new owners
6 days ago

New body set up to vet plant operator card schemes

Contractor trades bodies unite to tackle competency concerns over plant operator skills cards
6 days ago

Kier leads switch to hybrid battery generators

Battery units work alongside smaller generators cutting run times by nearly 60%
6 days ago

Plans in for first Leeds co-living scheme

Watkin Jones submits plan to convert old Direct Line HQ into 230 studio flats
6 days ago

Demolition worker crushed by excavator

Court hears 20-year-old woman was left with "life changing injuries"
7 days ago

Government pays £700m for 50% stake in Sizewell C

New body, Great British Nuclear, will be set up to develop pipeline of nuclear projects
6 days ago

Costain wins Heathrow Airport asset renewal deal

Firm takes early contractor involvement role in Terminal 2 baggage handling upgrade
7 days ago

Worker killed on £683m waste power plant site

Fatal collision involving heavy goods vehicle on giant north London site
1 week ago

Contractor services