Weak kick-off to 2024 as construction starts fall across the board

  • 7th February 2024

The healthcare construction industry saw a 10% drop in activity in the three months to the end of January, mirroring trends across the wider sector.

This is revealed in the February edition of the Construction Index published this week by Glenigan, one of the construction industry’s leading insight experts.

The report focuses on the three months to the end of January 2024, covering all underlying projects, with a total value of £100m or less, with all figures seasonally adjusted.

Providing a detailed and comprehensive analysis of year-on-year construction data, it reveals that project starts nose-dived compared to 2023 figures, plummeting 36% across all sectors.

This included residential construction which, having rallied in the previous edition of the Index, weakened 34% on the year before.

All other vertical performance was weak, with non-residential project-starts finishing 37% lower than the same period last year.

And the report reveals that activity within the health sector decreased 10% against the preceding three months, to stand 33% down on the previous year.

This downhill trajectory is unsurprising given persistently high interest rates and intense economic uncertainty, keeping public and private investors cautious about committing to new projects.

Commenting on the Index findings, Glenigan’s economic director, Allan Wilen, said: “The February Index shows project start performance remaining frustratingly slow across the sector, amid eye-watering economic conditions.

“This protracted period of depression is evident in sharp declines across the private residential, industrial, and commercial sectors.

“On a more-positive note, though, civil engineering starts remain slightly more stable, posting a modest decline against the preceding three months.

“But they remain sharply lower than this time last year.”

Regional performance

The report shows weakening project starts across most areas of the UK during the three months to January.

The South East suffered the heaviest fall, declining 25% during the three months to the end of January to stand 54% down on a year ago.

It was a similar story in the Scotland, with the value of project starts decreasing 30% against the preceding three months and remaining significantly down (-38%) on the previous year.

And project starts in Wales experienced a sharp fall against both the preceding three months (-30%) and previous year (-50%) while the North East was a mixed bag, with the value of starts increasing 1% against the preceding three months, but falling back 18% on the year before.

The East Midlands, on the other hand, experienced a 42% increase against the preceding three-month period, although starts in the region remained 30% behind last year’s figures.

Northern Ireland and the West Midlands weakened against the preceding three months, falling back 9% and 12%, respectively.

Both regions were down on the previous year, remaining 33% and 16% lower than a year ago.

This was also the case in Yorkshire & the Humber and the North West, which both crashed compared to both the preceding three months and the previous year.

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