The West Midlands experienced a poor Q4 2022, with project-starts, main contract awards and detailed planning approvals all declining on the previous year and preceding quarter.
West Midlands overview
Work starting on-site in the West Midlands added up to £973m during Q4 2022, a 53 per cent decline compared with the preceding quarter and 68 per cent fall against the previous year. A total absence of any major (£100m or more) project-starts exacerbated the decline. Underlying (less than £100m in value) project-starts also performed poorly, falling 29 per cent against the preceding quarter ona seasonally adjusted basis to stand 23 per cent down on a year ago.
Totalling £1.6bn, main contract awards in the West Midlands by half compared with the preceding quarter and 26 per cent against the previous year. Major project contract awards totalled £200m during the period, an 80 per cent decline on the preceding quarter and a 46 per cent fall on 2021 levels. Underlying contract awards, at £1.4bn also performed poorly, having decreased 48 per cent (SA) against the preceding quarter and 22 per cent against a year ago.
Detailed planning approvals in the West Midlands added up to £1.3bn during the period, a 32 per cent decrease on the preceding quarter to stand 42 per cent down on the previous year. Major project approvals totalled £100m, a 60 per cent decrease on the preceding quarter and a 78 per cent decrease on the previous year. At £1.2bn, underlying detailed planning approvals decreased 45 per cent (SA) against the preceding quarter to stand 33 per cent lower than a year ago.
Sector analysis: project starts
Private housing accounted for almost half (42 per cent) of work starting on-site in the West Midlands during the Q4 2022 with the value adding up to £412m. Despite this, private housing-starts fell 42 per cent compared with a year ago. A further decrease was prevented by the £85 million ‘Swans Landing’ scheme in Stratford-On-Avon. Industrial project-starts also suffered, decreasing 57 per cent against the previous year to total £200m. Industrial was the second-most active sector in the region, accounting for 21 per cent of project-starts. Infrastructure (-97 per cent) experienced the steepest fall compared with a year ago to total £50m, a 5 per cent share of the total value.
Some sectors bucked the trend, one being education which, at £65m, experienced triple-digit growth (+185 per cent) against 2021 levels to account for a 7 per cent share of the total value. Utilities (+157 per cent) and Hotel & Leisure (+176 per cent) also experienced triple-digit growth, with starts totalling £26m and £49m respectively.
Value of project starts in the West Midlands during Q4 2022 by sector
| Sector | Value of Project-Starts (£m) | Change on previous year | Change on two years ago | %Share |
| Private Housing | 412 | -42% | -1% | 42% |
| Industrial | 200 | -57% | 194% | 21% |
| Social Housing | 85 | 59% | -12% | 9% |
| Education | 65 | 185% | -29% | 7% |
| Infrastructure | 50 | -97% | -95% | 5% |
| Hotel & Leisure | 49 | 176% | 1323% | 5% |
| Health | 37 | -28% | 4% | 4% |
| Offices | 28 | -53% | -68% | 3% |
| Utilities | 26 | 157% | 42964% | 3% |
| Retail | 14 | 35% | -52% | 1% |
| Community & Amenity | 7 | -4% | 71% | 1% |
| Total | 973 | -68% | -46% |
Sector analysis: detailed planning approvals
Private housing also accounted for the greatest proportion of detailed planning approvals (41 per cent) in the West Midlands, with the value adding up to £412m. Despite this, private approvals more than halved (-58 per cent) against 2021 levels. Industrial approvals, accounting for 12 per cent of the region, also weakened (-50 per cent) compared with 2021 levels to total £159m. community & amenity experienced the sharpest decrease of any sector, with the value having fallen 73 per cent against the previous year to total £8m.
In contrast, office detailed planning approvals performed well having increased 305 per cent compared with a year earlier to total £159m. The sector accounted for 12 per cent of the total value, being boosted by the approval of the £24m extension to the ‘MIRA Technology Park’ in Warwickshire. Retail approvals, accounting for 2 per cent of the total value, also experienced triple-digit growth (+167 per cent) against 2021 levels to total £30m. Utilities at £59m also bucked the trend, with the value of approvals almost doubling (+90 per cent) against 2021 levels to account for a 5 per cent share of the total value.
Value of detailed planning approvals in the West Midlands during Q4 2022 by sector
| Sector | Value of Project-Approvals (£m) | Change on previous year | Change on two years ago | %Share |
| Private Housing | 530 | -58% | -46% | 41% |
| Industrial | 159 | -50% | -13% | 12% |
| Offices | 159 | 305% | 670% | 12% |
| Hotel & Leisure | 143 | -8% | 134% | 11% |
| Social Housing | 79 | -52% | -59% | 6% |
| Education | 67 | -54% | -12% | 5% |
| Utilities | 59 | 90% | 470% | 5% |
| Health | 44 | -27% | 239% | 3% |
| Retail | 30 | 167% | -28% | 2% |
| Infrastructure | 22 | -41% | -75% | 2% |
| Community & Amenity | 8 | -73% | 18% | 1% |
| Total | 1301 | -42% | -22% |
Forecast construction starts for West Midlands
| Underlying project-starts (£m) | Change on previous year | |
| Quarter 1, 2021 | 1,986 | 37% |
| Quarter 2, 2021 | 1,367 | 12% |
| Quarter 3, 2021 | 1,280 | 38% |
| Quarter 4, 2021 | 1,258 | 5% |
| Quarter 1, 2022 | 2,088 | 5% |
| Quarter 2, 2022 | 1,684 | 23% |
| Quarter 3, 2022 | 1,508 | 18% |
| Quarter 4, 2022 p | 958 | -24% |
| Quarter 1, 2023 f | 1,423 | -32% |
| Quarter 2, 2023 f | 1,325 | -21% |
| Quarter 3, 2023 f | 1,284 | -15% |
| Quarter 4, 2023 f | 1,214 | 27% |
| Quarter 1, 2024 f | 1,505 | 6% |
| Quarter 2, 2024 f | 1,486 | 12% |
| Quarter 3, 2024 f | 1,529 | 19% |
| Quarter 4, 2024 f | 1,425 | 17% |
Note: Underlying projects are schemes with a construction value of £250,000 to £100 million. Forecast updated in November 2022 p – provisional, f – forecast. Source: Glenigan
Glenigan – celebrating its 50th anniversary this year – is CN Intelligence’s partner for UK construction project data, market analysis and company intelligence.
Glenigan combines comprehensive information gathering with expert analysis to provide intelligence on all construction sectors, including private and social housing, education, health, hotel and leisure, industrial, infrastructure, offices, retail, and utilities, and across all regions of the UK and Ireland.
Find out more: www.glenigan.com
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