Latest News Tue, Mar 22, 2016 5:15 PM
The steep declines in underlying construction activity seen during the first quarter of the year eased in the three months to April as the Glenigan index declined by 7% compared to April 2012.
Declines in retail, health and other public sector starts were softened by gains in infrastructure and utilities starts, with rail, road and renewable energy projects driving the gains in these sectors.
The Glenigan Index for the three months to April fell by 7% compared to April 2012, project starts have now fallen in every month of 2013 but April saw a marked improvement in a number of sectors.
Underlying starts in both the civil engineering sectors increased compared to last year; underlying starts were up 9% in the infrastructure sector and 17% in the utilities sector compared to April 2012. Education starts also increased over the last month following good gains during the first quarter, starts were up 15% compared to April 2012.
"While the overall index declined in April there was a marked improvement in project starts for some sectors. Gains in infrastructure starts were driven by road and rail projects in London and the South East, and renewable energy projects pushed up starts in the utilities sector, with wind farms in Scotland and Wales providing the largest boost."
"The gains seen in the civils and other sectors this month are encouraging signs, especially in light of the poor project starts during the first quarter and official data showing industry output fell 6% compared to the first quarter of last year." commented Glenigan Economist Andrew Whiffin.
Housing starts were weak once again this month, although the pace of decline in the private housing sector did slow, starts were 7% down on a year ago, compared to an 18% decline in March. Strong activity was recorded in the sector last year and the recent slowdown seems to point to house builders easing off of the development pedal.
"The housing slowdown is likely in reaction to recent lending data that shows levels of mortgage approvals in the first quarter of the year are failing to surpass levels seen in 2012, despite continued government support for home buyers." added Whiffin.
Education starts have performed well since the start of the year, the sector has benefited from gains in refurbishment projects while new builds have remained firm. Further refurbishment work is due to come online later in the year as the first tranche of Priority Schools Building Programme projects start on site.
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