Glenigan reports on public sector increase

A Glenigan product story

Edited by the Buildingtalk editorial team Jul 9, 2009

A Glenigan report reveals an increase in public sector construction projects, mainly through government investments in the education, health and social housing sectors.

Construction project starts are forecast to stabilise and the public sector recovery is to gather momentum, in the second half of this year.

The June Glenigan Index reveals that government investment has begun to filter through, helping to steady the flow of new projects starting on site after the sharp falls endured over the last year.

The Glenigan Index, which tracks the underlying value of construction projects starting on site, saw the year on year decline ease to 20 per cent.

This compares with year on year declines of 30 per cent in recent months.

The increasing public sector projects are helping to counter sharp falls in the flow of private sector projects.

While most regions have suffered a fall in project starts, Scotland and Northern Ireland have bucked the trend.

Education projects were the main driver for Northern Ireland.

In contrast, the West Midlands, the North East and South West of England have suffered the sharpest falls in projects starting on site.

According to Allan Wilen, economics director, "Glenigan forecasts that the recent recovery in public sector starts will gather momentum during the second half of 2009".

"This will drive the overall stabilisation in construction project starts".

"Growing pressure on Government finances will temper this momentum in the medium term, however".

Mr Wilen added that "We expect the current divergence in between the housing sector to widen over the coming months with an increase in social housing projects contrasting with a depressed private sector development which remains constrained by poor conditions in the wider housing market".

"The fortunes of non-residential construction will be mixed".

"The boost from the public sector purse will be offset by weak activity in the office, industrial and retail sectors".

"Civil engineering projects starts will strengthen as new renewable energy, rail and road schemes commence".