New private housebuilding plummeted by 51% compared to a year ago and are 39% below the three months to March, according to data from Glenigan, which says the industry is suffering a “protracted depression”.
Across all building work – residential, non-residential and civil engineering – the value of underlying work starting on-site during the three months to March fell 35% compared to the previous quarter and was 46% lower than a year ago.
The building data firm says its latest April Construction Index reflects the “downhill trajectory” reported in its February and March surveys, which tracks the progress of projects valued at £100m or less.
It says: “This protracted period of depression is emphasised through a massive 46% decline during the index period, compared to last year’s figures, as climbing interest rates keep public and private investors cautious about committing to new projects.”
New project starts were poor across the country, but Yorkshire & the Humber suffered the heaviest fall, declining 57% during the first quarter and 65% down on a year ago.
London fell back 28% in the first three months and was 42% down on the same period 12 months ago.
Glenigan economic director Allan Willen says: “Poor construction performance in the three months to March is disappointing but unsurprising, with a continued slowdown in project starts reflecting the UK’s stagnant economic situation.
“Despite the Chancellor’s confirmation that we are not entering a recession in last month’s Budget, the UK economic outlook remains weak.
“Investor and consumer confidence is at a low ebb which has, inevitably, stalled private sector activity.
“Public sector starts have also disappointed, reflecting capital under-spending by a number of government departments during the last financial year.
“However, the Chancellor also used the Spring Statement as an opportunity to bring forward some of these underspent funds to the new financial year.
“This is potentially good news for those contractors specialising in critical infrastructure, where this money will likely be committed, helping to boost the industry through greater investment in mega-projects and transport upgrades throughout the rest of 2023.”
