The UK construction sector shows mixed results for May 2024, with a notable rise in project starts offset by declines in contract awards and planning approvals.
- Despite a 25% fall in underlying health work projects compared with the previous quarter, major project starts surged significantly.
- There was a stark decrease in health main contract awards and planning approvals relative to the previous year.
- Hospitals saw the largest increase in project starts, with a substantial rise compared to the same period last year.
- The South East emerged as the leading region for health project commencements, while other regions showed varied results.
Despite an overall 25% reduction in underlying health work compared with the previous quarter, major project starts saw a dramatic increase, illustrating a significant shift towards larger investments. Projects over £100 million in value more than doubled from the prior quarter, marking a remarkable improvement over the previous year’s inactivity in this sector.
In contrast to the surge in project commencements, health main contract awards experienced a pronounced decline. Main contract awards dropped by 39% compared to the preceding three months, and when compared with the previous year, the drop was even steeper at 49%, suggesting challenges in finalising new contracts amidst evolving market conditions.
Detailed planning approvals mirrored the downward trend, slipping 21% from the preceding quarter and falling by a significant 57% compared to the previous year. Such figures indicate potentially longer timelines and delays in project rollouts, affecting the overall pipeline of construction activities in the health sector.
Remarkably, hospital projects led the charge in new commencements, comprising over half of the sector’s starts. The investment in hospital infrastructure rose by 72% from the previous year, totalling £500 million, while nursing home projects also experienced an uptick, albeit more modestly, at 10% growth.
The South East was notably active, contributing significantly to national project starts with a staggering 121% increase from the previous year. London followed suit, manifesting a sevenfold rise in project engagement, reflecting concentrated efforts and possibly favourable regional policies encouraging health sector development.
The UK construction health sector is navigating a complex landscape, highlighted by significant regional disparities and a pivot towards larger scale projects.
