Housebuilding starts slumped by 39% during the first three months of the year compared to the previous quarter and is 51% lower than a year ago, data from Glenigan shows.
Across all construction – residential and non-residential – new projects fell 22% against the preceding three months, and stand 46% lower than the same time last year, says the building data firm’s April Construction Review.
Glenigan economic director Allan Wilen says: “Poor construction performance in the first quarter 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.”
The report adds that major contract awards “stalled”, falling 4% in the three months to March and 15% down on a year ago.
But it adds that “on a more positive note” detailed planning approvals lifted on both the preceding quarter and the previous year, by 41% and 29%, respectively.
Glenigan’s Wilen adds: “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.”
