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Infrastructure underpins construction growth

Recent data from research organisation Glenigan reveals a 4 per cent growth in construction projects starting on site for the three months to September compared to the same period a year ago.
The increase is the result of 34 per cent and 7 per cent growth in the infrastructure and non-residential sectors respectively and a 14 per cent decline in residential project starts.

Infrastructure growth was driven by large investments in road and rail station projects in the South West and South East of England. Growth in the value of utilities projects was less pronounced, but the sector still benefitted from projects including the decommissioning of a nuclear power plant and a £75 million wind farm in Lancashire. In addition to the growth in the underlying value (under £100m) of infrastructure starts was the start of £160m Woolwich Station development as part of Crossrail.

Office and industrial construction increased significantly, with project starts including a £35m Distribution Centre in Lancashire and (above the £100m underlying value threshold) the £150m Trinity Square development in Gateshead.

The 14 per cent fall in residential reflects 2 per cent and 25 per cent falls in private housing and social housing project starts respectively. 'Whilst further retrenchment in social housing construction is forecast for the near future, private housing starts are expected to stabilise over the coming months' commented Glenigan economist James Abraham.

London, the South East and South West of England saw most growth in the flow of new work while the East Midlands and Wales saw annual growth of over 10 per cent. By contrast, over the three months to September the underlying value of project starts in Scotland and Northern Ireland fell by more than a fifth together with stagnant performance in Wales, the North East and North West of England.

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18 October 2011


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