The construction industry has recently witnessed a modest boost in project starts, indicating a rising confidence among investors and stakeholders.
- Overall project starts have seen a 2% increase over the three months to July, following a 13% fall in the preceding quarter.
- This upturn is largely driven by significant growth in residential and civil engineering projects, rising 12% and 9% respectively.
- Conversely, non-residential construction projects have declined by 10%, reflecting uneven sector performance.
- Infrastructure projects present a positive outlook with a notable 45% increase compared to the previous year.
The latest data indicates a slight recovery in the construction industry, as project starts have increased by 2% over the past three months. This increase marks a reversal from the previous quarter, which experienced a 13% decline, suggesting a renewed sense of optimism among investors and stakeholders. The growth is primarily concentrated in the residential and civil engineering sectors, which have improved by 12% and 9%, respectively.
However, the industry’s recovery is not uniform across all sectors. Non-residential construction projects have decreased by 10% during this period, highlighting a disparity in sector momentum. Within the non-residential domain, education and hotel and leisure projects have shown resilience, with education projects increasing by 24% compared to the same time last year. Similarly, hotel and leisure projects have grown by 18% from 2023. Nevertheless, the community and amenity sectors, along with health projects, faced significant setbacks, with declines of 44% and 30%, respectively, from the previous quarter.
Infrastructure projects, on the other hand, have displayed substantial growth, increasing by 45% compared to the prior year and by 21% against the last quarter. This surge is contrasted by a downturn in utility projects, which have fallen by 8% over the past three months and 16% from the previous year. Allan Wilen, Glenigan’s economics director, pointed out that the rise in private housing starts serves as a positive indicator of investor confidence and consumer demand. However, he cautioned that the uplift in civil projects might be temporary due to recent governmental decisions to postpone road and rail projects.
The overall improved sentiment is tempered by ongoing challenges within the sector, particularly in non-residential construction. The upcoming general election and the government’s reassessment of capital programmes have introduced uncertainties, affecting social housing and non-residential projects. Wilen commented that despite these challenges, the industry should take heart from the present results, as they represent a budding renewal of confidence in the market.
This growth in project starts signals cautious optimism within the industry despite underlying challenges.
