Weak economic conditions mean construction project starts have fallen by 21% in 2024 compared to 2023 levels – concerning given the UK’s shortfall of housing supply.
Research by construction intelligence firm Glenigan identified major cutbacks to construction projects amid rising borrowing costs and weak demand.
Averaging £7,211 million per month, work starting on site in the three months to the end of April decreased 10% against the preceding three months, remaining 21% lower than a year ago.
Major project-starts fell dramatically, dropping 21% on the previous period and 34% compared to 2023.
Allan Wilen, Glenigan’s economic director, said: “Project-starts are struggling to match last year’s levels, as the industry continues to be plagued by uncomfortably high interest rates.
“Furthermore, shrinking workloads in some key sector verticals, particularly residential construction, are holding back short-term recovery.”
Major planning approvals fell 34% against the preceding period, with the value decreasing by 12% on last year.
Residential starts fell 16% during the three months to the end of April, to stand 18% lower than a year ago. Private housing faltered (-14%) on the preceding period, weakening 17% compared with 2023 levels.
Social housing was the major contributor to residential-starts decline, falling 21% against the preceding three-month period and 19% on the previous year.
Regional Performance
Performance was inconsistent across UK regions, however there were a few bright spots of activity.
Northern Ireland did particularly well, increasing 20% against the preceding three months to stand 33% up on the previous year. This can be partly attributed to a sharp boost in hotel & leisure-related work, continuing the region’s recent growth streak.
Elsewhere, the North East saw the value of starts decrease by 2%, yet increase by 38% against 2023 figures.
Wales registered the worst performance of all, seeing the value of starts compared to 2023 almost halved (-44%) and over a third (-37%) against the preceding three months. It was a similar story in the East Midlands, which registered a dismal 43% drop on last year’s figures to slump by exactly a third (-33%) when matched against the three months to April.
To varying degrees, London, South East, West Midlands, East of England, Yorkshire & Humber and Scotland, all recorded declines during the Index period and compared to 2023 levels.