Digging into the data: construction review April 2024

January to March 2024 has been a challenging quarter for the construction industry, as continued economic uncertainty and challenging market conditions continue to deter private sector investment. That said, there are some encouraging signs, with some much-needed boosts to development pipelines. Read on, as we take a closer look at the Glenigan Construction Review for January to March 2024…

The UK economy has been a topic of much discussion and concern over recent months, with high inflation rates, the continuing cost-of-living crisis and official data confirming that the country slipped into a technical recession in 2023. That said, there are signs of economic activity steadying during the first quarter of 2024, with GDP rising by 0.2% during January. Construction output increased by 1.1% in January (according to data from the ONS) and the latest CIPS manufacturing survey also points to a small rise in activity during March.

Looking at the construction industry and both detailed planning approvals and main contract awards remained flat against the previous year and the preceding three months, while project starts also decreased 3% compared to the previous quarter, averaging at £7,215 million per month.

While office, civils, infrastructure and utility project starts all decreased compared to the previous quarter, it’s certainly not all doom and gloom, with some much-needed light at the end of the tunnel. Office main contract awards increased 115% during Q1, standing at 5% up on the same period in 2023. Office detailed planning approvals fell this quarter but remain strong at 67% above the previous year. As to be expected, London was the most active area of the country for new office developments, accounting for a significant 70% of the total value. 

It's a similar story for projects within the civil engineering sector, with detailed planning approvals up 1% compared to the preceding three-month period and up 78% compared to 2023 levels, totally £7,177 million. At £2,196 million, highways projects accounted for the greatest share (49%) of civil engineering starts during Q1, reflecting significant demand and investment. Interestingly, Northern Ireland accounted for 36% of all civil engineering project starts during this quarter, the highest of any area, followed by West Midlands, which accounted for 15%.

Looking at the country as a whole and it’s interesting to note that London no longer holds the crown for project starts, experiencing a 24% decrease against the preceding three months. Instead, it is the East of England that experienced the strongest performance, with the value of project starts increasing 13% compared to the last quarter and up 25% compared to 2023.