Uncertainty over this month’s EU referendum saw construction project start-ups dip five per cent year-on-year in the three months to May with the north worst hit, figures reveal.
Despite residential starts rising sharply on the previous three months, they failed to match last year’s levels, according to the latest Glenigan Index.
Higher office project starts have helped offset a weakening in public sector non-residential projects but the reversal in civil engineering projects dampened overall starts.
The North East, North West, West Midlands and Scotland all saw project starts slip back after the positive performance recorded in the previous survey.
Project starts in the East of England, South West and Yorkshire and the Humber were up on a year earlier, while starts in the capital were virtually unchanged.
Commenting on this month’s figures, Allan Wilén, Glenigan’s economics director, said: “The drop in project starts during May is disappointing, even though it had been anticipated.
“There was a sharp decline in private sector starts during May which dragged down the three month total and suggests that developers are now delaying their commitment to new projects until after the EU referendum. This, combined with a fall in civil engineering project and a continued weakening in public sector starts, contributed to the overall decline in the index.
“However in contrast to the current weakening in project starts, the development pipeline remains firm. Overall the value of projects securing detailed planning approval during the first five months of 2016 is seven per cent up on a year ago.
“Furthermore the strongest growth has been in areas such as private housing and office developments which have increased 23 per cent and 13 per cent respectively. Whilst investor nervousness is likely to dampen project starts near term, we anticipate that there will be a rise in projects going out to tender over the coming months as clients’ line up work to start on site.