Project-starts fell by nearly half (-46%) in the first quarter of the year, compared to the same period the year before, Glenigan research shows in the April 2023 edition of its Construction Review.
Averaging £5,067 million per month, work commencing on-site fell 22% against the preceding three months.
Allan Wilen Glenigan’s economic director, said: “Poor construction performance in Q.1 can be attributed to persistent, external economic pressures. Soaring energy costs and materials price inflation is driven in part by the Russia-Ukraine conflict but also a wider, global shortage of key components, which are weighing the industry down, leading to pauses and delays in project starts.
“An overall softening in activity across most of the UK construction sector aligns with the general, downward pattern of wider UK economic activity. High-interest rates, declining business investment, and the resulting squeeze on household incomes are curbing activity in consumer-related verticals, including retail, hotel & leisure, and private housebuilding.
“However, it’s not all doom and gloom. The Chancellor’s recent Spring Budget offers some positive news for UK contractors, with promised capital investment in publicly-funded sectors. Particularly education, health and transport infrastructure, indicating a boost to the construction pipeline.”
Residential starts-on-site fell dramatically during Q.1, dropping 39% in the three months to the end of March, standing 51% lower than a year ago.
Private housing was also down 39% on the preceding three months, with performance slashed in half compared with the previous year.
