Grim end to 2010 but bright spots ahead

Grant Prior 11 years ago
Share

A toxic mix of bad weather, the Christmas lull and falling public spending resulted in one of the lowest construction starts levels for years during the last quarter of 2010.

Grim figures from Glenigan show starts fell by 29% compared to the same period in 2009.

Glenigan economist James Abraham said: “Extreme weather conditions exacerbated the seasonal lull combined with the slowdown in government investment resulted in one of the lowest monthly total project starts in years.”

Residential projects were 31% down, non-residential 20% down and civil engineering 50% lower than the same period a year ago.

Glenigan is forecasting that construction projects starts will fall by 7% this year compared to 2010 following a 6% year on year increase in the value of starts from 2009 to 2010 that was primarily fuelled by the private sector.

Private housing, industrial, office, retail and civil engineering projects starts are expected to grow this year, while social housing, hotel & leisure, education, health and community & amenity project starts are forecast to decline.

Allan Wilen, economics director, Glenigan said: “The impact of planned Government investment cuts is clear with only rail avoiding the axe and increasing private sector confidence not quite strong enough to counter Government cuts.”

Office developments will see the strongest growth of 41% year on year as developers respond to increasing demand from tenants plus rising capital and rental values, particularly in central London.

Wilen said: “Little new floorspace came onto the market in the recession and the shortage of quality office space will worsen as the recovery gathers momentum.”

Strengthening UK manufacturing, improved investor confidence, rising property capital values and a fall in available floorspace will boost industrial construction project starts by 29% year on year. The sector was hit particularly hard by the financial crisis and economic recession with project starts falling 60 per cent over the last three years.

Retail construction is forecast to increase 4% year on year following a very strong 2010. The major supermarkets will continue to expand throughout 2011 with retailers and landlords expected to increasingly refurbish existing premises in an attempt to increase footfall and consumer spending.

The hotel & leisure sector will see a 24% year on year decline in new construction project starts as the 2012 Olympics related boom seen in 2010 fades with the majority of Games related projects now underway.

Abraham said: “The fall in Government investment since the start of the financial year has already had a negative effect on the value of construction projects starting on site, most strikingly in the health sector.

“Project starts in the education, social housing and community & amenity sectors are all forecast to fall by over 25% year on year having held up relatively well in the Autumn.”

Latest news

53 jobs axed at Cleveland Bridge

First wave of redundancies as talks continue with interested buyers
1 hour ago

Morgan Sindall posts storming set of results

Profit, turnover and net cash surge ahead with more to come during the rest of the year
9 hours ago

World’s largest scaffold wrap installed at Bullring

Embrace Building Wraps team finishes work on five tonne scaffold banner over Selfridges store: Video
47 mins ago

Plan unveiled for 27-floor Manchester resi block

Full £200m plan for former Renaissance hotel site redevelopment revealed
9 hours ago

Profits set to hit £820m at Taylor Wimpey

Record number of completions as rising house prices offset materials price inflation
8 hours ago

Altrincham’s House of Fraser redevelopment plan

Rackhams building to be overhauled with two more floors and large green wall
9 hours ago

Mace wins green Mayfair office scheme

Berkeley Square office project is first for property investor Astrea
8 hours ago

Balfour wins race for Hub South East spot

Balfour joins BAM and Morrison as Tier 1 contractors
9 hours ago

Nearly a third of major contractors paying faster than 30 days

Average payment times edge forward by a day to 34 days - full list
1 day ago

Nmcn now expects losses to hit £43m

Contractor confirms latest jump in estimated losses and delays results again
2 days ago

Wates raids WSP for new healthcare chief

New senior healthcare team to target Government's £20bn new hospitals programme
1 day ago

HS2 to pioneer 3D printed graphene reinforced concrete

Skanska Costain Strabag JV to start trials next spring using 5t robots on site
2 days ago

Plans go in for next major phase of £1bn Middlewood Locks

Salford site to get new new resi towers of 32, 28 and 15 storeys
1 day ago

Hollywood studio plans £700m Hertfordshire base

Another major film studio to be built in Hertfordshire
2 days ago

17 firms win £560m social house building deal

North west social housing consortium JV North plans to build 4,000 homes
2 days ago

Willmott Dixon wins Telford Station Quarter scheme

Telford & Wrekin Council moves forward with phase one of town centre regeneration scheme
1 day ago

Cleveland Bridge administrators to resume production

Staff will be contacted this week to finish contracts as buyer sought
3 days ago

Henry Boot launches new tech JV after £1bn Golden Valley win

Contractor's property arm teams up with developer Factory to target tech schemes
2 days ago

Brickabilty snaps up southern roofing contractor

Hampshire-based Leadcraft bought for £5.5m
2 days ago

Contractors warned over surge in contaminated plastic waste

Fresh crackdown after thousands of tonnes of construction plastic wrap waste blocked from illegal export
2 days ago

Plans in for £180m Milton Keynes tower scheme

Work could start before end of year on £180m mixed-use scheme
2 days ago

Campaigners win court fight to block £1.7bn Stonehenge tunnel

High Court judge quashes development consent granted by Transport Secretary Grant Shapps
5 days ago

Bidding starts for Midlands £28m Camp Hill Line stations

Bidding starts for three new stations after Covid-19 delay
2 days ago

£350m Manchester twin skyscraper plan approved

Twin 56-storey residential towers to join Great Jackson Street cluster
6 days ago

Ballymore strikes deal for 2,800-home West London site

Partnership deal with Sainsbury's for 18-acre canalside site at Ladbroke Grove
5 days ago

Utilities firm Fulcrum plunges to £11.5m loss

Firm hit by second wave lockdowns delaying contract awards and mobilisations
5 days ago

Green light for £100m UK Holocaust Memorial building

Work to start later this year on large memorial building next to Parliament
5 days ago

Government pledges another £81m for cycle lanes

Highway Code to be revamped to prioritise cyclists
5 days ago

Long Scottish Covid lockdown cost Robertson £11.5m

Private building group plunged into £6.1m trading loss by 3 month lockdown
6 days ago

Funding deal green lights £40m modular student scheme

Financier Maslow Capital backs Audley Modular Student Living’s latest scheme in Edinburgh
5 days ago

Contractor services