The construction sector saw a 33% rise in project-starts in the three months to May compared to the three months before, research from construction firm Glenigan has revealed.
However, it’s thought this upturn will be temporary owing to the economic backdrop, while year-on-year there’s still been a 17% reduction in activity.
Glenigan cited the government’s delay in publishing its Spending Review and departmental strategies as an issue, saying the sector is ‘battling against a tide of political indecisiveness and economic uncertainty’.
Allan Wilen, economic director at Glenigan, said: “The results are superficially impressive, but a closer look reveals a sector still struggling to reestablish its foothold.
“It’s hardly surprising. UK construction is continuing to adjust to mercurial market conditions, sometimes having to respond in the moment to the constantly shifting international and domestic economic landscape.
“Particularly, higher operational costs, likely to keep rising in the near future, mean clients are delaying investment decisions. Likewise, contractors are lukewarm to putting shovels in the ground right now when funding is not forthcoming.”
Wilen added: “There’s no denying US tariff policy has definitely exacerbated the uncertainty. However, steps to de-escalate trade tensions may go some way to improving the current situation, with steps like the US-UK tariff deal going some way to improving confidence over the coming months.
“Furthermore, the government clearly setting out its strategic store will also help to boost momentum as more promised public works are greenlit.”
Detailed planning approvals rose sharply, dramatically increasing by 52% compared to the previous year and 51% over the previous three months.
However, this was the result of one project: the Lower Thames Crossing, a road connecting Kent and Essex.