Project starts down by a fifth as major schemes dry up

The value of construction projects starting on site has plummeted by almost a fifth this winter, according to new data.

Industry-intelligence specialist Glenigan said 19 per cent less work got underway in the three months to 31 January than in the same period a year earlier.

The research showed ground was broken on little over £5bn-worth of large schemes – those individually valued at more than £100m – in the latest spell, a drop of 46 per cent.

Meanwhile, the combined worth of smaller schemes starting on site only dropped by 4 per cent, to £16.5bn.

Private housing accounted for more than two-thirds of the total value of construction projects getting underway in the three months to January, according to Glenigan.

However, the value of residential starts was still more than a tenth lower than a year earlier.

New civils activity was down 41 per cent in the latest period, with health and education sectors seeing drops of 38 per cent and 22 per cent respectively.

In more positive news, the value of industrial starts grew by 12 per cent, while the worth of hotel and leisure ground-breakings rose by 17 per cent.

Glenigan said the pipeline of main contract awards and planning approvals each reduced by more than a fifth in the most recent rolling quarter.

“This points to the likelihood of further declines in both large-scale and smaller-project starts in the months ahead,” it warned.

“However, recent interest rate cuts and the prospect of a gradual economic recovery may help to restore investor confidence as the year progresses.”

The South East remained the busiest region for residential construction starts, although activity fell 37 per cent year on year to £1.6bn.

Meanwhile, the East of England and Scotland bucked the trend, experiencing growth of 73 per cent and 86 per cent respectively.

London accounted for more than a quarter of the value of schemes approved by planning authorities in the latest period.

Glenigan economic director Allan Wilen said: “While housing projects are still lagging compared to last year, the government’s focus on housebuilding and increasing consumer confidence should help form a growing development pipeline.

“The key will be translating this potential into actual construction starts.”

Data from the Office for National Statistics last week showed that growth in the construction sector lagged behind the general UK economy in 2024.