Mission begins have fallen by round a 3rd in worth over the previous three months, pushed by a decline in main initiatives and weak enterprise confidence, in accordance with the newest knowledge.
The worth of schemes beginning within the three months to the tip of February fell by 32 per cent in contrast with the equal interval final yr, Glenigan reported in its newest Building Overview report.
The information intelligence supplier described a “freeze” on main undertaking begins, with just a few £100m-plus developments getting underway throughout the newest interval.
“This slowdown is because of delays in planning approvals, larger borrowing prices and weaker enterprise confidence, prompting builders to delay funding till the financial outlook improves,” Glenigan stated.
It additionally reported that detailed planning approvals fell by 21 per cent in contrast with the interval between November 2023 and February 2024.
Glenigan stated that whereas main contract awards (of £100m or extra) rose by 35 per cent yr on yr, a 29 per cent drop in smaller awards offset this progress, elevating “issues about future undertaking begins”.
Glenigan economics director Allan Wilen stated: “The sharp drop in undertaking begins displays the continued struggles throughout the trade.”
He added: “Whereas the surge in main contract awards suggests future exercise, actual sustained progress hinges on improved approvals.”
Wilen stated the federal government’s shake-up of the planning regime underneath the Planning and Infrastructure Invoice had the potential to be “transformative”.
However he added: “Its affect might be decided by how swiftly and successfully it’s applied. A key problem lies in uncertainty over native authorities’ capability to ship reforms on the tempo wanted to unlock stalled initiatives.”
Glenigan stated industrial building was a “uncommon vivid spot” with undertaking begins rising 16 per cent yr on yr and warehousing/logistics leaping 70 per cent to £872m. The sector now accounts for 48 per cent of all begins.
However the analysts warned: “This progress might not be sustainable, as detailed planning approvals for industrial initiatives have fallen 20 per cent in comparison with final yr.
“With out a constant pipeline of authorized initiatives, the sector’s momentum may swiftly fade in 2025.”
In the meantime, separate knowledge from Barbour ABI confirmed that the worth of latest orders in building fell by 10 per cent to £7.6bn in February 2025, in contrast with the month earlier than.
Barbour ABI chief analyst Ed Griffiths stated: “Regardless of a fall in February awards, the advance in 2025 continues, being 18 per cent up on the identical interval in 2024.”
As with the Glenigan knowledge, Barbour ABI highlighted the expansion in infrastructure, as the worth of latest orders elevated by 76 per cent month on month.
“Infrastructure stays a vivid spot, with continued authorities deal with renewables and clear vitality pointing to continued progress on this sector,” stated Griffiths.
Forward of the chancellor’s Spring Assertion on 26 March, he stated it will be “fascinating to see if any ‘huge ticket’ infrastructure schemes are introduced by Rachel Reeves”.
