Construction starts down 29%

Construction project starts for the last three months of 2010 plunged 29 percent year-on-year, the latest Glenigan Index has shown, and building project starts this year are expected to fall by seven percent year-on-year.

The fall follows a six percent year-on-year increase in the value of construction project starts from 2009 to 2010 that the private sector primarily fuelled. Private housing, industrial, office, retail and civil engineering project starts are expected to grow, while social housing, hotel and leisure, education, health, and community and amenity project starts are forecast to decline.

Office developments will see the strongest growth of 41 percent year-on-year as developers respond to increasing demand from tenants plus rising capital and rental values, particularly in central London, Glenigan says.

Retail construction is forecast an increase of four percent year on year following a strong 2010. The major supermarkets will continue to expand throughout 2011 with retailers and landlords expected to increasingly refurbish existing premises in an attempt to increase footfall and consumer spending.

The hotel and leisure sector will see a 24 percent year on year decline in new construction project starts as the 2012 Olympics related boom fades, Glenigan says.