Private resi performance increase lifts construction starts: Glenigan – Mortgage Strategy

The value of underlying work starting on-site increased 7% against the preceding three months, despite standing 7% lower than a year ago, the latest Glenigan index reveals.
The uptick in construction-start performance was driven by activity growth in key verticals including residential and civils.
The overall value of residential project-starts improved during the index period, rising 22% against the preceding quarter.
However, the value remained 8% lower than the previous year.
Work starting on-site in the private housing sector went up by 30% compared to the preceding three months despite falling short of 2023 levels by 4%. Meanwhile, social housing project-starts declined by 4% against the preceding quarter, and 21% against the previous year.
Industrial project-starts increased by 45% during the three months to August but remained 27% lower than a year ago.
Retail starts saw a modest increase of 3% against the preceding three months and stood 4% up on the previous year while community and amenity starts decreased by 31% against the preceding three months but rose 1% when weighed up alongside the previous year.
Similarly, hotel and leisure project-starts decreased by 22% against the preceding three months but finished 17% higher than the previous year.
However, education starts declined by 29% against the preceding three months and fell 22% compared to 2023.
Health and office starts both experienced a weak index period, with health project-starts decreasing by 28% against the preceding three months and by 44% on the previous year, while office starts fell by 14% and stood 27% down on 2023 figures
Civils work starting on-site went up by 18% against the preceding three months and standing 9% up on the previous year.
On a regional basis, the East Midlands experienced a 65% rise in starts against the preceding three months, standing 16% up against the previous year.
The South West and Northern Ireland saw starts increase by 20% and 32%, respectively, against the preceding three months, standing 6% and 36% up against the previous year.
However, the value of starts in Yorkshire and the Humber and Wales declined by 19% and 6% during the three months to August and were 12% and 46% down respectively on a year earlier.
Glenigan economist, Drilon Baca says: “It’s heartening to see project-starts rising during the Index period. As market inflation and persistently high interest rates start to ease, we’re noticing an increasing confidence among developers which is starting to buoy the residential market.”
“The industry can also take hope from signs of individual vertical recovery. For instance, civil engineering project-starts grew by almost a quarter against the preceding three months. However, the new Government’s keenly-anticipated Autumn Budget and upcoming spending reviews are expected to have a significant effect, particularly on infrastructure starts.”