The UK construction industry’s performance reveals significant fluctuations in project starts, contract awards, and planning approvals during May 2024.
- Industrial project-starts declined by 6% compared to the previous quarter and showed a substantial 31% decrease from the previous year.
- Despite a decline in planning approvals, major industrial contract awards experienced considerable growth, boosting development prospects.
- Warehousing and logistics were significant contributors to the sector, accounting for almost half of all industrial project starts.
- Regional performance was notably varied with the East Midlands and Northern Ireland showing growth, while others experienced declines.
Industrial project-starts experienced a notable decline of 6% compared to the preceding quarter and a stark 31% fall from the previous year. This translates to a total value of £1.265 billion. Notably, major projects, valued at £100 million or more, displayed a remarkable increase of 256% compared to the previous quarter, nearly tripling the levels seen in 2023.
Main contract awards within the industrial sector demonstrated resilience by rising 26% against the preceding three months. While this reflects a positive trend, the figures were still 3% lower than the previous year. Major projects reached £611 million, marking a significant 343% rise from the earlier quarter, illustrating an upswing over the previous year, which had no major projects.
In contrast, detailed planning approvals for industrial projects showed a downturn with a 44% drop from the previous three months, and a 31% decrease compared to the previous year, totalling £1.936 billion. Although major project approvals dipped 91% compared to the last quarter, there was a 4% increase from the previous year.
Warehousing and logistics emerged as prominent players, contributing £626 million, marking a 32% increase from the last year, fundamentally driving the sector forward. Other industrial projects grew by 51% compared to the previous year, summing up to £188 million, a smaller yet significant portion of the industrial landscape.
The East Midlands stood out as the most active region with a 186% growth from the previous year, solely influenced by the SEGRO Logistics Park Northampton Plot 4 development, reaching £440 million. Northern Ireland also showcased growth, doubling the previous year’s figures to £113 million. However, regions such as Yorkshire & the Humber and the East of England saw declines, indicating varied regional performance.
In May 2024, the UK industrial construction sector displayed a mixed performance with both positive developments and notable declines across different areas.
