A continuing increase in commercial activity is currently the main driver of growth in the construction industry according to figures released by sector analyst Glenigan.
The company’s latest survey of project starts, covering schemes starting on site during the three months to October, shows that office and retail starts both saw a 25% year on year increase from 2013 to 2014.
Glenigan said the the commercial sector has been boosted by a number of major London schemes, including the £95M One Mitre Square development (pictured) which broke ground in August.
Glenigan economics director Allan Wilén said: “Commercial and civil engineering work are taking over from housing as the lead drivers of new construction starts.
“This broad footing of construction growth bodes well for the upcoming period of political uncertainty ahead of the general election, and as expectations of an interest rate rise appear to be dampening confidence among UK homeowners.”
Meanwhile the monthly Glenigan Index for November, which looks at the value of construction projects starting on site, has increased by 4% compared to a year earlier. This figure is up slightly from 3% in September and marks the 17th consecutive monthly Index rise.
In the residential sub sector, Glenigan reports that private house building remains on the up with starts rising by 15% so far in 2014. However social housing starts are showing no sign of increase in the year to date.
“A weakening in industrial confidence” has coincided with the first fall in project starts for the sector since July last year according to Glenigan. But the analyst expects this trend to be short lived, with industrial still on course to be the fastest expanding sector during 2014.