The construction industry is springing into life with improved project starts and a strong development pipeline signalling brighter prospects for the sector, according to the latest figures from Glenigan.
Although starts were still 13 per cent lower than a year ago, research by the analyst shows the industry is stabilising following a winter of disruption with starts in the first three months of 2016 up five per cent on the previous quarter.
Many of those areas worst affected at the turn on the year by the flooding and waterlogged ground have seen the sharpest turnaround in project starts.
The North West, West Midlands, East of England and Scotland all saw a double digit growth in the value of projects starting on site during the first quarter.
According to the latest Glenigan Index, strong private sector development pipeline is also expected to boost tendering opportunities over the coming months.
“The rise in starts during the first quarter against the closing months of 2015 demonstrates the positive outlook for industry workload over the coming months,” said Allan Wilén, Glenigan’s economics director.
“The development pipeline is continuing to strengthen, with the value of work securing planning approval in the first quarter nine per cent up on a year of planned projects, driven by an increase in private sector schemes. The development pipeline of private housing, industrial and office projects are particularly strong.
He added: “Private investor confidence will be key. Near term we anticipate that some private sector investors will defer their final commitment to proceed with planned projects until after June’s EU referendum. Nevertheless 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 in the second half of the year.
“Accordingly while the impending vote is likely to dampen project starts in the near term, the second half of 2016 could see a sharp rise in activity as private investors press ahead with projects once the issue of EU memberships has been resolved.”