Figures released by construction intelligence provider, Glenigan, forecast a 7.4% increase in project starts during 2014
The 2014 Mid Year Construction Review and Forecast, prepared by Glenigan’s economics team, indicates the upturn in construction activity is gathering momentum, with growth revised upwards from 4% at the beginning of the year.
Glenigan recorded a 10% rise in the value of projects starting on site during the first half of 2014, primarily driven by increases in private housing, industrial and commercial building projects.
Work volumes will continue to improve across these sectors through the latter half of the year, with private housing set to increase by 14% and 28% growth predicted for industrial projects. The value of underlying office project starts is forecast to rise by 9%, building on the strong recovery seen over the last two years.
“The industry’s prospects point to sustained output growth during the second half of the year and into 2015,” Allan Wilén, Economics Director, Glenigan. “Renewed consumer confidence and the accompanying revival in the general housing market have emerged as key growth drivers for both construction activity and the wider economy.”
There has been concern for some time that the economic recovery is regionally unbalanced, with London taking more than the lion’s share in growth and jobs. In terms of construction, the capital was the fastest growing part of the UK during 2013, with the value of underlying project starts rising by 21%.
However, while London has led the initial recovery, more balanced construction growth is expected for the second half of 2014. Construction activity will remain firm in the capital, with high profile office projects such as the £500 million Scalpel and £340 million London Wall Place developments set to break ground, however stronger growth in starts is forecast elsewhere.
Central and northern England is expected to enjoy the strongest growth, as the rise in housing market turnover and mortgage availability spur private housing development.
Office project starts are anticipated to pick-up in major metropolitan areas as the demand for more quality office space spreads beyond the capital, such as the £100 million Central Square development in Leeds. Retail and leisure project growth is also expected to be widely spread across the UK as consumer spending picks up.
Caption All areas of construction in the UK is expected to benefit in growth, especially in the office sector.