Project starts dip on referendum uncertainty
Developers delaying their commitment to new projects until after the EU referendum is suggested by Glenigan as the reason for the value of work starting on site in the three months to May being 5% down on the same period a year earlier. The decline was largely due to a sharp drop in project starts during May against a year earlier.
However, Glenigan’s economics director Allan Wilén sees reason for optimism in the longer term. He said, ‘In contrast to the current weakening in project starts, the development pipeline remains firm.
‘Overall, the value of projects securing detailed planning approval during the first five months of 2016 is 7% up on a year ago. The strongest growth was in private housing and office developments, which have increased 23% and 13%, respectively.
‘Whilst investor nervousness is likely to dampen project starts near term, we anticipate that there will be a rise in projects going out to tender over the coming months as clients line up work to start on site.’
The latest figures for project starts show residential starts in May sharply up on the previous three months but failing to match the previous year’s levels. High office project starts helped offset a weakening in public-sector non-residential projects.
