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PRO INSTALLER APRIL 2015
PRO BUSINESS
@proinstaller1
Construction shakes
off winter cold
A double digit rise in private housebuilding has driven construction
activity into positive territory for the first time this year,
according to new figures from industry analysts Glenigan.
The Glenigan Index for
March, which covers
the value of projects
starting on site in the
three months to February, is 6% up on a
year ago, with private
housing returning to
the forefront of industry growth.
The underlying value of
private housing schemes
starting on site rose by
12%, taking the Glenigan
Residential Index to 8%
higher than a year earlier,
the fastest rate of expansion since August 2014.
There was also some respite for the social housing
sector, where starts were
up on a year earlier for
the first time since August,
albeit by a modest 2%.
Allan Wilén, Economics Director at Glenigan,
said: “Buoyant financial
results statements released
by several housebuilders
in recent weeks point to
housing market conditions
remaining strong.
“Sales rates have remained level with, or
above, rates seen during
the first eight weeks of
2014, despite the number
of mortgage approvals
falling by 17% between
January and December last
year.”
He added: “A tightening
of lending procedures by
the Bank of England led
to a cooling in mortgage
lending throughout 2014.
“However approvals
picked up by 2% between
November and December
- a sign that the reforms
have bedded in and mortgage credit may begin to
ease once more over the
coming months.
“Moreover, the pipeline
of potential schemes is
strong. The underlying
value of detailed planning
approvals secured for private housing schemes has
risen by 15% over the 12
months to January.”
Non-residential construction starts expanded by 5%
compared to a year ago,
fuelled by gains in privately funded building.
Industrial starts rose by
8% compared to a year
earlier, a strong performance given that starts
in this volatile sector
expanded by 86% during
the same three months last
year.
New commercial construction remains on the
up with the office, retail
and hotel and leisure
sectors all seeing higher
values of starts compared
to 2014.
Across public sector
dominated areas, activity
was more subdued.
The underlying value of
education starts rose by
3% during the latest three
months. However growth
in the underlying value of
health starts has faltered
after growth in the third
and fourth quarters of last
year.
Meanwhile, the decline
in community and amen-
ity projects seen during
2014 has continued unabated. Starts fell by 11%
during 2014 and are down
a further 20% over the last
three months.
London saw a modest
drop in starts during the
last three months, which
were down by 4%. However, as starts rose by 47%
during the same period
of 2014, the dip points to
stabilisation rather than a
sign of weakening activity
ahead.
The Northern regions
have been the main
engine of growth across
England over the last
three months, with the
East Midlands also recording a strong rise in
activity.
Wales and Northern
Ireland registered higher
levels of starts than a year
ago; however activity in
Scotland is still being hindered by a slowdown in
detailed planning approvals during 2014.
The monthly Glenigan Index is based on extensive research
of every construction project starting in the UK over the
previous three-month period, providing an indicator of
developing activity and future output in the industry.
Minister signs £330m
North East Growth Deal
Greg Clark, Minister for
Universities, Science and
Cities visited Science Central in Newcastle on 25th
February to sign the North
East Growth Deal, which will
see nearly £330 million of
government funding invested
into the North East.
The minister joined Paul Woolston, Chair of the North East Local
Enterprise Partnership (LEP), to
sign the Growth Deal at Science
Central. Over the lifetime of its
deal (2015 to 2021) the LEP estimates that up to 5,000 new jobs
will be created.
‘bring together
local, national and
private funding’
Mr Clark said:
“The Growth Deal is a historic
deal between central government
and local leaders and businesses,
by devolving powers and money
from Whitehall to the North East
so that local areas can lead their
own growth. The Growth Deal I
am signing builds on the region’s
strengths - the projects to improve
local transport infrastructure,
boost skills and drive innovation
will play an important part in the
region’s growth in the future.
“The North East Growth Deal
will bring together local, national
and private funding as well as new
freedoms and flexibilities.”
An expansion of £40.6 million of government funding was
announced on 29 January 2015,
on top of £289.3 million when
the Growth Deal was originally
announced in July 2014.
Growth Deals are a £12 billion
long-term programme aimed at
revitalising local economies.