Housing Construction down 40 percent in the UK

According to the Glenigan Index, social housing construction projects are valued 40 percent lower than just a year ago. Additionally, the construction of private housing has dropped 2 percent from a year ago, despite an increase earlier this year. As a result, the Glenigan Residential Index is down 20 percent.

“Whilst social housing starts are likely to remain under pressure over the coming months, a renewed recovery in private housing starts is anticipated at the end of the year as housebuilders capitalise on gradually improving market conditions” according to Allan Wilen, economics director, Glenigan in a statement.

“Private housing had previously been a source of optimism, as returning private sector confidence encouraged developers to invest in new work. However, this quarter’s dip in project starts highlights the fragility of the recovery. Poor household earnings growth and rising unemployment, combined with limited mortgage availability are expected to restrict the pace of recovery in new house sales and project starts during the remainder of 2010” said Mr Wilen.

The UK seemed particularly hard-hit by the global economic recession. As a result, budgets have been slashed to reduce the deficit, leaving construction projects in limbo.

There is some good news. The Glenigan Civil Engineering Index posted a 39 percent increase from a year ago due to an increase in utility projects and two rail projects in development in the Southeastern part of England.

“Regionally only the East Midlands, Wales and the North East saw significant rises in the value of new work compared to a year ago while the flow of new work dropped by a quarter or more in London, Northern Ireland, the East and South East” said Mr Wilen.

The Glenigan Index provides market intelligence for the UK construction industry and is published on a monthly basis by Glenigan.

Source: Glenigan