Glenigan’s December review indicates a pick-up in momentum as financial security begins to return
- 31% increase in project starts year-on-year
- 6% increase in prime contract awards compared to 2023 levels
- 34% decrease in detailed plan approvals compared to the previous year
Yesterday, Gleniganone of the construction industry’s leading insight and intelligence experts, releases the December 2024 edition of its Construction Review.
This review focuses on the three months to the end of November 2024, covering all major (>£100m) and underlying (<100m) projects, with all underlying figures seasonally adjusted.
It is a report that provides a detailed and comprehensive year-on-year analysis of construction data, giving built environment professionals a unique insight into the sector’s performance over the past 12 months.
The latest data paint a generally positive picture. Project starts and major contract awards showed promising year-on-year growth, highlighting the return of socio-economic stability after an extended period of market uncertainty. But dampening these increases in activity, detailed planning approvals suffered a significant decline, suggesting persistent cost pressures and dented industry confidence continue to hamper a sector-wide revival.
Commenting on the December Review, Allan Wilen, Chief Financial Officer at Glenigan, said, “There is definitely work to be done and the latest figures show glimpses of recovery, with modest growth in project starts and contract awards offering some optimism. The Autumn Statement and some of the immediate measures which the government has taken to kick-start construction in certain verticals, especially house building, will have helped However, the sharp decline in detailed planning approvals shows that investors will keep their powder dry until more stability returns to the market, inspiring the confidence needed to turn on the tap for the development pipeline.
“In line with our forecast forecasts, H.1 in 2025 is unlikely to see significant growth, but H.2 is likely to see a sudden spurt, following the government’s spring spending review and sector-specific strategic announcements. A sustained focus on public infrastructure, health and housing projects will be critical to driving recovery in 2025 and beyond.The industry will be watching closely to see how these fiscal policy and investment commitments translate into business place.”
Underlying sector analysis – Housing
The review period was relatively stable for home construction, with project starts falling 1% from the previous three months to 6% lower than a year ago.
Private housing starts were largely responsible for the decline, which fell 3% from the previous three months and 1% from a year earlier.
However, this was offset by social housing starts which rose 4% in the three months to November, despite coming in 20% lower than a year earlier.
Underlying sector analysis – Occupation
Overall, non-residential developments increased during the index period, with starts against both the previous quarter and last year.
Hotel & Leisure experienced a strong period, with bookings up 37% on the previous three months and up 71% on the same time a year ago.
The number of educational projects also increased, increasing by 31% compared to the previous three months and increasing by 29% compared to the previous year.
Offices had a good period, with the value of underlying project starts up 24% compared to the previous three months and 2% higher than a year ago.
The performance of industrial project starts was dismal, falling 22% in the three months to November to be 4% lower than a year ago. Community and amenities also fared poorly, with the value of project starts falling 14% on the previous three months and 15% on the previous year.
Civilian growth was poor, initially down 17% from the previous three months and unchanged from a year earlier. This was somewhat boosted by infrastructure activity, with starts up 1% over the previous three months and up 36% over a year ago.
Energy startups did not perform well, falling 41% over the previous three months to 34% lower than a year earlier.
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