2023 - Glad To See You Go

In its 2023 assessment, Glenigan says it has been a 44% fall in project-starts against 2022; there has been a 26% decline in main contract awards during the three months to November 2023 but there has been a 12% rise in detailed planning approvals against 2022 levels.

The figures are found in Glenigan’s 2023 Construction Review. It’s main focus is on the three months to the end of November, covering all major (>£100m) and underlying (<100m) projects, with all underlying figures seasonally adjusted.

2024

High interest rates and inflation are likely to further constrain projects moving to site but a 12% rise in detailed planning approvals against the previous year suggests a strong development pipeline should help to turn the tide in Q.1 2024.

Commenting on the December Review, Allan Wilen, economics director at Glenigan, says: “Unfortunately, this review shows the construction industry is still struggling under the burden of high interest rates, a weak economic outlook and political turmoil.

“This has had a significant effect on private non-residential investment. Elsewhere it has delayed publicly funded projects in areas such as health and education, which the government is approaching with trepidation as budgets are squeezed.”

Slow recovery

Wilen continued: “Focusing on the industry as a whole, we can expect slow progress, which will prevent a quick recovery in project-starts. Despite this, we’re starting to see evidence of an improving development pipeline, with a small uptick in planning approvals. This should, hopefully, buoy the industry in the new year.”

Residential

The sector-specific and regional index, which measures underlying project performance, paints a picture of general decline. Project-starts across every vertical fell in the three months to November. The review period was relatively stable for residential construction, with project-starts falling 3% against the preceding three months to stand 12% lower than a year ago.

Social housing construction-starts were largely responsible for the decline, falling by a tenth against the preceding three months and by 5% compared with last year.

However, this was balanced out by private housing-starts which were little changed on the preceding three months, dipping 1% during the three months to November, despite coming in 14% down on the year before.

Non-Residential

Poor performance in the non-residential sector echoed the industry-wide tale of decline and fall. Hotel & leisure tumbled 49% against 2022 levels. Industrial construction-starts also fell 49% compared with a year ago. Health and education project-starts plummeted 51% and 13% respectively.

Office-starts fell by 44% on a year ago.

Picture: Construction starts for 2023 are down hugely against 2022.

www.glenigan.com