The value of construction projects starting on site in the UK has dropped by 40 per cent compared to 2022, while new planning applications have also slowed dramatically, according to new data from Glenigan the construction industry specialist.
Glenigan’s economic director Allan Willen says “Many will be disappointed to see performance levels continue to proceed on their downward trajectory, but given the current economic malaise its hardly surprising. The year got off on a slow footing, with a further weakening in project starts during the three months to February reflecting the ongoing ripple effect of international conflict, weak economic policy, disrupted supply chains, and rising costs.”
Residential construction experienced an overall decline in the three months to February as starts fell 27% to stand 43% lower than a year ago. Private housing performance finished 29% down against the preceding three months and 39% compared with the previous year.
Meanwhile, the value of starts across non-residential sectors fell by 19% during the three months to February, finishing 38% lower than levels seen last year.
Clearly the impact of higher development finance costs and the inflationary effect on the construction industry has hit hard. This is going to have a serious knock on effect on the already stretched housing market in the UK. We have written here previously about the desperate shortage of student accommodation. Clearly this issue is not going away overnight.
If you would like to speak to us about how to invest correctly in the current market, as ever please reach out to one of our expert team, we would love to hear from you.
