Social housing work boosts construction sector
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Government funding has helped social housing projects give a much-needed boost to the construction industry, according to market research.
The Glenigan Index, which publishes monthly construction industry market intelligence, recorded social housing projects were 5 per cent higher during the second quarter of 2009 compared with the previous year.
While ‘the becalmed housing market and weak corporate investment’ continue to depress private sector projects, the research finds, further improvements are expected for social housing schemes for the remainder of this year.
It notes that education, social housing and utilities projects all saw ‘positive signs’ leading up to June, with a 16 per cent year on year decline recorded in this month. This was an improvement of up to a third on sharp declines seen in earlier in the year.
Allan Wilén, economics director at Glenigan, said: ‘The fall in new project starts is forecast to moderate over the coming months as the initial impact of the credit crunch eases.
‘However, with the UK economy in recession the flow of private sector projects in particular will remain weak.’
Private schemes in the north east, west midlands and south England have suffered sharp falls in construction work.
Scotland, Northern Ireland and Yorkshire and the Humber saw rises in projects starts in the three months to July because of public sector and civil engineering schemes.
Developers remain focused on completing and securing sales on existing projects, the index found, while ‘the pressure on government funding finances will restrict the flow of the public sector schemes in the medium term’.
The recession, weak household earnings and limited mortgage availability will also prevent early recovery in new house sales or projects starts, Glenigan predicts.
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