Construction growth to continue in 2015
Construction project starts will increase by 7.3% in 2015 following renewed consumer confidence and investment, according to a new report from industry analysts Glenigan.
The Construction Prospects for 2015 report, prepared by Glenigan, suggested rising confidence and investment in the private sector are driving growth in construction activity. Output volumes rose 0.8% during the third quarter of 2014 to stand 2.9% up on a year earlier, the sixth consecutive period of annual quarter on quarter growth.
Glenigan has also recorded an 8% rise in the value of projects starting on site in 2014, particularly in private housing and non-residential building projects, suggesting that sustained output will continue in 2015. In particular, the residential market is expected to remain an important engine for construction growth, with private housing project starts due to rise by 12% in 2015. Activity is expected to ripple out from London and the South East as faster average earnings growth further strengthens consumer spending and confidence.
Allan Wilén, economics director at Glenigan, said: "Current output growth largely reflects the strengthening in project starts recorded by Glenigan during 2013 and the opening months of this year, with rising private sector and infrastructure investment lifting industry workloads. The pre-construction pipeline also remains firm, with strong growth in private housing approvals, in particular, offsetting weakness in public sector areas.
"Renewed consumer confidence and the accompanying revival in the general housing market have emerged as key growth drivers for both construction activity and the wider economy."
In contrast, the Glenigan report claims that government-funded investment generally remains constrained. Social housing starts are a particular weak spot, with the value of project starts falling by 4% this year and further decline forecast for 2015.
Looking ahead, the industry analysts expect rising private sector investment and improved consumer confidence to underpin further growth in both detailed planning approvals and project starts during 2015. Project starts are forecast to grow by 7.3% next year, building upon an estimated 8% increase during 2014. -
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