Civil engineering brightens the market

Civil engineering brightens the market

UK construction growth stalled in the third quarter because of a drop in public sector work, according to the latest Glenigan Index, offsetting strong growth in civil engineering projects starts and a sharp rise in London.

 

The Index, covering the value of projects starting on site from July to September is unchanged compared to the same period in 2012 as falls in government funded projects were enough to offset a strong rise in civil engineering starts and a rise in private housebuilding.

 

The civil engineering progress was due to a doubling in utilities projects in the quarter, giving a 29% year on year increase which Glenigan expects to see continue into 2014 as the transport and energy sectors gather momentum. The Priority School Building programme and a rush by local authorities to provide primary school places are expected to make education a bright spot next year.

 

The value of private housing projects starting on site was up 7% on a year ago, but non residential building schemes were down 11% due to a sharp public sector decline allied to few commercial projects starting. Glenigan says their survey indicates a general weakening in publicly funded areas like health and community and amenity projects. Social housing showed a 7% fall.

 

London showed the biggest growth in project starts, up 30% compared to a year ago, due to private housing and education projects. Substantial private housing rises were also seen in the East Midlands and the North East, but the West Midlands and the Yorkshire and the Humber areas suffered the sharpest falls, of 25% and 22% respectively, reversing growth seen in the early part of the year.

 

Glenigan’s Economics Director Allan Wilen said: “The latest data underlines the fragility of the recovery, with falls in government funded sectors and a pause in the flow of private commercial projects offsetting a strengthening in private housing and civil engineering work. Nevertheless, we anticipate renewed growth during the final quarter of 2013 and next year as private sector sentiment improves.”

 

Glenigan also expects the commercial and industrial sectors to pick up. Industrial projects were up 18% on a year ago and further growth is expected.

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