Public spending cuts drive down housing starts
Social housing construction starts suffered a sharp fall in the first quarter of 2012, according to new figures released today.
There were 17 per cent fewer projects started in the sector than during the same period of 2011, according to building data provider Glenigan.
The fall offset a 15 per cent increase in private construction starts, leading to an overall 4 per cent drop. That figure represents the biggest year-on-year decline since May 2011, when data revealed a 5 per cent fall.
James Abraham, an economist at Glenigan, said the overall drop in starts showed that private sector growth was continuing to be held back by cuts to public sector spending.
‘There was a similar pattern of private sector growth versus public sector cuts in non-residential construction,’ said Mr Abraham. ‘Office and industrial building is responding to a shortage in supply following three years of limited building and supermarket investment remains high. However, the health, education and community and amenity all fell, as public sector cuts continue to bite.’
Regionally, Yorkshire & the Humber and the east of England showed the biggest decline, with both areas seeing a 30 per cent fall in starts.
Mr Abraham said that the slowdown in residential house building was expected to continue over the course of 2012, but added the lack of new build projects could see an increase in spending on refurbishment work.