The number of construction projects started in May 2009 showed less of a year-on-year decline than previous months, according to the latest Glenigan Index of construction projects.
May showed only 25% year on year decline, compared to falls of 35% and 30% year on year in March and April 2009 respectively, according to economics director Alan Wilen.
Early leading indicators are even more encouraging. Construction projects going out to tender averaged 38 per day in May 2009 compared with a February 2009 low of 30 projects per day.
This is a 27% increase on the back of a sharp fall over the previous 18 months.
The majority of the new work has been smaller public sector projects and jobs associated to major Government projects.
While a high number of small projects indicate that conditions are still challenging, Glenigan forecasts that the value of underlying construction project starts during the second half of 2009 will be little changed on a year earlier.
This is much lower than two years ago, but encouraging after an estimated 24% year on year fall during the first six months of 2009.
Planning applications for household and small private housing projects were much improved. And coincided with a modest recovery in mortgage approvals. Whilst housing market conditions are forecast to remain harsh during the second half of 2009, the rise in planning applications suggests that the initial turmoil from the credit crunch as the banks tightened their lending criteria has begun to ease.
Nevertheless market activity is still extremely weak and over the coming months developers will remain focussed on building out and selling existing projects rather than opening up new sites.