Housebuilder Confidence Dented By Fragile Recovery

Organisers of a major national green energy conference in Liverpool are announcing

today that Liverpool John Moores University (LJMU) is to be a prime sponsor of the event.

1950 projects worth 1.4bn started on site from May to July, compared to 2450 projects worth 2.5bn in the previous three months. "Private housing had been a source of optimism as returning private sector confidence encouraged developers to invest in new work. The dip in the last three months highlights the fragility of the recovery." commented Glenigan economist James Abraham.

Mr Abraham continued "The latest Glenigan data comes fast on the heels of the sharp 9% jump in second quarter construction output recorded by ONS. Second quarter output has been buoyed by the earlier rise in project starts and industry efforts to make up time lost to bad weather at the start of the year. The weakening in new project starts over the last three months points to an easing in construction output growth during the second half of this year."

Mike Riley, Director of the School of the Built Environment said that the GPF conference provided the perfect opportunity to promote the department's projects which are being implemented nationally.

This has left the Glenigan Residential Index for July, which tracks projects between the value of 250,000 and 100m, 22% down on a year ago. Whilst social housing starts are likely to remain under pressure over the coming months, a mild recovery in private housing starts is anticipated at the end of the year as housebuilders capitalise on gradually improving market conditions.

Overall the Glenigan Non-Residential Index for the three months to July was 22 per cent down on a year ago. Despite restrictive fiscal policy over the next few years, a more widespread strengthening in private sector activity is anticipated over the two year forecast period supported by renewed private sector confidence and investment.

Civil engineering continues to be the industry bright spot with the Glenigan Civil Engineering Index for July 19% up on a year ago. While the growth rate in the underlying value of utility projects fell, infrastructure project starts increased by a third. "In particular growth was boosted by two railway projects in the South East of England with a combined value of 160m that started on site in June" noted Mr Abraham.

Overall, the value of construction projects starting on site in the three months to July was 12% down on a year ago. Looking ahead Mr Abraham commented "The outcome of the comprehensive spending review will weigh heavily on public sector starts over the next two years. Despite the good flow of retail and hotel projects over the past few months, private non-residential activity has been a disappointment. Improved business confidence and lending conditions have been slow to lift industrial and office starts. Nevertheless, a number of stalled schemes are once again being taken forward and an increase in project starts is expected by the end of the year.

by: Paul Myers..

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