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Civils bucks recessionary trend with 39% surge in project starts

A raft of road projects and energy sub-sector projects have supported a 39% surge in civil engineering project starts compared to this time last year, figures from contract leads monitoring service Emap Glenigan have revealed.

Several road projects and energy sub-sector projects have supported a 39% rise in civil engineering projects compared to this time last year. The outlook for this sector is expected to remain positive throughout 2009 as a result of new projects in the renewable energy sector and spending on rail and road infrastructure.

However the collapse of the residential property sector means the market overall has fallen 23% year on year. Glenigan is now forecasting that the construction industry will contract by 30% year on year in the first half of 2009. Although the outlook is expected to improve in the latter half of the year, construction activity is likely to remain subdued until 2011.

 “The March Glenigan Index is published in the wake of official statistics showing a two per cent fall in industry output in 2008 which was weakened by a sharp fall in housing, industrial and commercial work,” said Glenigan economics director Allan Wilén.  “The short term outlook for construction remains bleak.  The slide in new project starts points to a further marked decline in construction output in 2009.”

However, residential projects are down 40 per cent on a year a go and continue to be hampered by limited mortgage availability and falling house prices.  Deteriorating economic prospects will prevent any recovery in the near term and this downward trend is likely to continue for at least the next two quarters as house builders try to sell existing stock.

Although all parts of the UK have suffered a collapse in construction projects, the Midlands, East of England and London have been the worse hit with only Northern Ireland showing resilience as a result of a PPP education project.bus

The Glenigan Index is published monthly by Glenigan, the leading providers of business intelligence on the UK construction industry, and is based on Glenigan’s extensive database of construction projects. The Index monitors and tracks the monthly flow of construction projects valued from £100,000 up to £100 million starting on site each month across the UK, to provide a definitive guide to trends and forecasts for the construction industry.

Readers' comments (2)

  • A really absurd headline given the reality referenced in the article “The short term outlook for construction remains bleak. The slide in new project starts points to a further marked decline in construction output in 2009.” Talk about 'head in sand' mentality!

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  • Is money for this surge in project starts "ringfenced" as in the case of the college refurb funding? If it is, I would want the money in the bank before I claimed to be bucking the trend. You might find that the money never materialises.

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