Latest reports reveal construction slowdown

Construction activity has slowed, according to two reports released today.

The value of new projects starting on site during the three months to November was 4% lower than last year, according to industry analysts Glenigan.

Housing, non-residential and civil engineering starts were all scarcer during the period compared to this time last year.

The report also revealed that the amount of new commercial and industrial work was flat on last year.

Private housing activity grew modestly, up 2% on a year ago. This rise was more than offset by the drag from the social housing sector, where starts were 9% down on a year ago.

Commenting on this month’s figures, Allan Wilén, Glenigan’s economics director, said: “The latest evidence on commercial construction starts is disappointing given the continued strength of the economic backdrop.

“However the forward pipeline is much more positive. In the office sector, for example, the value of work achieving planning approval has risen by more than 50% during the last three months.”

Also released today, the Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) was down from 58.8 in October and signalled the slowest expansion of business activity for seven months.

Aside from the pre-election slowdown seen in April, overall output growth was the weakest since mid-2013.

All three broad areas of construction activity were found to have experienced a slowdown in output growth during November. Residential building activity increased at the weakest pace since June 2013, while civil engineering activity rose at the slowest rate for six months and was the worst performing subcategory.

Commercial construction activity topped the growth table, but the latest expansion was less marked than October’s eight-month high.