Construction starts have hit a 10-year low, according to fresh figures, as client confidence ebbs away amid the economic gloom.
Data released by industry insight specialist Glenigan showed the volume of work getting underway on site in the first quarter of this year was lower than any three-month period in the past decade.
The closely watched Glenigan Index – which discounts schemes worth more than £100m and adjusts for seasonal fluctuations – has been dropping steadily for almost a year and has now reached levels last seen when the UK teetered on the edge of recession in early 2013.
Residential construction starts in the rolling quarter to March 2023 were half the level seen during the equivalent spell a year earlier.
Other building projects plummeted in number by 42 per cent over the same period, while civil engineering works were almost a third lower.
Glenigan economic director Allan Willen said: “Poor construction performance in the three months to March is disappointing but unsurprising, with a continued slowdown in project starts reflecting the UK’s stagnant economic situation.
“Investor and consumer confidence is at a low ebb, which has, inevitably, stalled private sector activity. Public sector starts have also disappointed, reflecting capital underspending by a number of government departments during the last financial year.”
However, chancellor Jeremey Hunt has outlined plans to invest outstanding funds in the coming financial year, Willen added.
“This is potentially good news for those contractors specialising in critical infrastructure, where this money will likely be committed, helping to boost the industry through greater investment in megaprojects and transport upgrades throughout the rest of 2023,” he said.
Both private and social housing starts were down by about a half over the past year, the data shows.
The value of projects getting underway was down 48 per cent in the industrial sector, 42 per cent in health, 40 per cent for offices, a similar level for leisure and about a fifth in the community sector. Education starts were up very slightly.
While infrastructure groundbreakings dropped by 49 per cent, in project-value terms, new-utilities activity rose by almost a quarter.
Yorkshire and the Humber suffered the heaviest regional fall, with starts declining by almost two-thirds in the year. In the South East, the amount of new work halved.
The index shows drops of 41 per cent in the North East, 28 per cent in London and 24 per cent in the South West.
Scotland, Wales, Northern Ireland, the East and West Midlands, and the North West of England all saw falls in project starts, as the malaise gripping the industry reached all corners of the UK.