Underlying UK construction work (under £100 million) commencing on-site during Q1 2021 was 5% higher than the previous year in value terms. It was also 2% higher than the preceding quarter on a seasonally adjusted basis.
Residential project-starts climbed a notable 17% on the previous year, while non-residential work starting on-site slipped slightly, down 2% compared to a year ago. Underlying civil engineering project-starts were far weaker, down 12% on the previous year.
The increased demand for construction materials and consumables is likely to increase demands on a strained supply chain, struggling with higher freight costs, higher raw material costs and container availability.
“Project starts have grown strongly despite the UK being in national lockdown for the majority of the first quarter,” commented Rhys Gadsby, Glenigan’s Economic Analyst. “Starts are at their highest level since September 2019. Private housing experienced a particularly strong period and was the main driver for overall growth, although industrial, offices and retail also achieved strong growth.
“Looking ahead the construction industry and its clients should have greater confidence to move more projects to-site during the second quarter as lockdown measures are progressively eased.”
Education work starting on-site declined a whopping 28% against the previous year while hotel & leisure project-starts, despite being 16% higher than the previous quarter, were 40% lower than a year ago.
More positively, industrial work commencing on-site climbed 27% on the previous year. Office project-starts were up too (8% on previous year). Retail experienced the greatest increase of 90% against the previous year and 60% compared to the preceding quarter, however that was from a very low base.
Gadsby added: “Civil engineering work commencing on-site during the first quarter of 2021 declined 12% against the previous year and 30% compared to the preceding quarter on a seasonally adjusted basis. Utilities project-starts experienced the greatest declines of 15% against the previous year and 54% compared to the preceding quarter. Infrastructure work starting on-site fell 11% compared to a year ago and 12% against the preceding quarter.”
UK construction: North East region is the biggest climber
Gadsby said: “The two most-northern regions of England experienced a good first quarter of 2021. The value of work commencing on-site in the North East climbed 51% against the previous year. The region achieved the greatest growth against the previous year. The North West achieved growth of 26% compared to a year ago and 14% against the preceding three months.
“Project-starts also performed strongly in London and the South West, having climbed 8% and 28% against the previous year respectively. London achieved growth of 18% compared to the preceding quarter whereas the South West experienced growth of 16%. Work starting on-site in Scotland climbed 4% against the previous year and 25% compared to the preceding three-month period.
“In contrast, the South East performed poorly with project-starts having declined by 26% compared to a year ago and 11% against the preceding quarter. The East of England, where project-starts fell 4% against the previous year and by a tenth compared to the preceding quarter, was another region to experience declines.”
