During the three months to June 2024, the UK construction industry displayed varied performance across different sectors.
- Construction starts during this period recorded a decrease compared to the preceding quarter, yet they remained substantially higher compared to the previous year.
- Main contract awards experienced significant declines both in comparison to the previous quarter and year-on-year figures.
- Detailed planning approvals also saw a reduction when contrasted with the earlier quarter and the same period last year.
- The data provides critical insights into the strategic shifts occurring within the UK construction sector.
Construction starts in the UK showed a complex pattern over the three months to June 2024. While the value of work commencing on-site averaged £9.25 billion per month, this represented a 13% drop from the preceding three months. However, this figure also stood 13% higher compared to the same period in the previous year. Major project starts, defined as those valued at £100 million or more, averaged £4.59 billion per month. This was an 11% decrease compared to the prior quarter but marked a significant 91% increase from the previous year, highlighting a marked trend towards larger-scale projects being initiated.
For underlying work, defined as projects valued at less than £100 million, the average monthly start was £4.66 billion. This category experienced a modest 2% decrease on a seasonally adjusted basis against the previous quarter, standing 19% lower than a year ago. These figures indicate a shift in focus within the industry towards larger, more substantial developments, potentially driven by strategic interests or economic considerations.
Main contract awards, an indicator of future construction activity, averaged £6.98 billion per month, reflecting a 34% drop compared to the preceding quarter and a 32% decline year-on-year. Underlying main contract awards, at an average of £5.01 billion, saw declines of 16% from the previous quarter and 30% from the year before. Additionally, major project contract awards fell sharply by 55% against the preceding three months and 38% compared to the previous year, averaging £1.98 billion per month. These metrics underscore a cautious approach by the industry towards new commitments in the face of potential uncertainties.
Detailed planning approvals, another vital indicator of future construction work, averaged £9.78 billion monthly. This represents a 19% decrease from the prior quarter and a 21% drop from last year. The approvals for major projects decreased by 43% over the three months and were down 40% on the year-on-year measure, averaging £3.15 billion per month. Meanwhile, underlying detailed planning approvals had a minor 1% increase from the preceding quarter but were still 7% less than the previous year, averaging £6.62 billion monthly. This data suggests a more restrained approach to developmental planning.
Glenigan, a partner for CN Intelligence, provides key insights into these trends, compiling extensive data across all UK and Ireland construction sectors. Their analysis spans various types of projects including housing, education, health, and infrastructure, offering a comprehensive view of the sector’s dynamics. Their intelligence reflects the nuanced shifts in the market amidst ongoing economic and regulatory challenges.
The UK construction sector’s performance over these months highlights strategic shifts and potential caution due to market uncertainties.
