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Housing market down by a third

Housing project starts for the three months to December 2010 fell by 31% compared to the same period in 2009.
Contract information business Glenigan reports in its monthly index that the fall was down to a combincation of the bad weather and Government spending cuts.

Residential projects were 31% down, non-residential 20% down and civil engineering fell to half the level in same period in 2009.

Glenigan economist James Abraham said: “Extreme weather conditions exacerbated the seasonal lull combined with the slowdown in government investment resulted in one of the lowest monthly total project starts in years.”

The company believes that construction project starts will fall by 7% this year compared to 2010, which follows a 6% year-on-year increase in the value of construction project starts from 2009 to 2010 that was primarily fuelled by the private sector.

Rebounds are expected from the private housing, industrial, office, retail and civil engineering sectors, although social housing is forecast to fall 25%, with similar declines in hotel/leisure, education and health project starts.

“The impact of planned Government investment cuts is clear with only rail avoiding the axe and increasing private sector confidence not quite strong enough to counter Government cuts,” said Glenigan economics director Allan Wilen.

About Fiona Russell-Horne

Fiona Russell-Horne
Group Managing Editor across the BMJ portfolio.

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