Private housebuilding starts jumped in the three months to the end of July, but construction starts across the wider industry fell by 1% on the previous three month period, according to Glenigan’s latest Construction Index.
The fall in activity continues the downward trajectory which has persisted for more than a year, with the quarter down 33% on the same period in 2022.
Glenigan said although the fall was less severe in the last quarter than it had been in some previous quarters “these scores are still poor, with higher inflation, fluctuating interest rates and labour shortages to blame”.
The company added that performance in the second half of the year would potentially by hindered by even tighter fire safety regulations and the recently enforced Parts F and L.
Alan Willan, Glenigan’s economic director, said: “The disappointment continues as the market remains depressed, and given the unusual economic circumstances, this is hardly surprising. Uncertainty has stalled activity and many investors, public and private, are reluctant to commit to new projects.
“Furthermore, 12 to 18 months out from a general election, it’s likely the incumbent government will adopt a more cautious approach, particularly to big infrastructure, in the lead-up. This will further slow activity in the short term.
“On the other hand, it was encouraging to see that private residential construction continues to rally, suggesting developers are altering their plans after a drop in starts during H1 2023. The Home Office’s easing of visa restrictions for construction trades may also improve staff recruitment and help lift activity further in the second half of the year.”
