The latest Glenigan Index, that covers the value of projects starting on site from November 2013 to January, rose by 4%, mainly due to continued expansion within the infrastructure sector.
The rate of growth has fallen compared with the 15% rise recorded in the three months to December 2013 with a 2% drop in the value of the non-residential index, as the pace of industrial and retail activity slackened. The sectors both saw double digit growth in project starts during the third and fourth quarters of 2013, but this rate slowed to 4% over the last three months.
However, activity in the office sector continued to increase at an increasing pace, with starts during the three months to January 63% higher than a year ago.
Commenting on the figures, Allan Wilén, Economics Director at Glenigan, said: “While the rate of growth at the beginning of the year suffers from comparisons to the very positive headline figures in the final quarter of 2013, the January Glenigan Index shows continued growth in private sector activity, with further rises in office, retail and industrial starts painting a picture of sustainable private investment-led growth in construction output.”
The value of residential starts fell in the three months to January, as private housing project starts declined by 26% compared with the same period a year ago. Surprisingly, perhaps, Glenigan has found this contrasted with continued growth of social housing starts, up by 25%. These figures suggest that, in the short term, the value of new private housing projects is not keeping pace with the expansion of last year. However, Glenigan figures suggest that output will remain strong as developers build out existing sites and look to accelerate new completions.
In the sectors most dependent on government funding, the underlying trends of last year continued to show a significant falling away. Health project starts dropped by 18%, following a 10% decline last year, while community and amenity starts were down by 44%, leading on from a flat 2013 for the sector.
In contrast, the education sector continued the strong growth seen during 2013, with a 24% increase in project starts over the last three months.
With the rate of growth slowing at a national level, the West Midlands, South West, East of England, North East and Yorkshire and Humber regions all saw starts decline compared to the levels of a year ago. The most severe drop was felt in the South West, which saw a 29% decrease.
London saw a modest rise of 2%, while strong double digit growth was seen in the South East, East Midlands, North West and Scotland.
The highest percentage growth was recorded in Wales and Northern Ireland, where new starts are recovering from low levels seen at the turn of 2013.
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