Glenigan is predicting a 1% rise in the underlying value of new project starts for the remainder of 2017, with a 2% increase to follow in 2018, as part of its most recent mid-year forecast.
It’s encouraging stuff, though public sector prospects remain a little harder to define. According to Glenigan, capital expenditure has risen since the EU referendum, with more public spending anticipated given the unexpected outcome of June’s General Election.
What does this mean? In the immediate future, investment is likely to gravitate towards such hot-button issues as the beleaguered NHS front-line or social housing provision post-Grenfell Tower, meaning less money for long-term infrastructure initiatives.
A Glenigan spokesperson said: “Political uncertainty and doubts over the Brexit negotiations will inevitably take their toll on the industry’s prospects for the coming two years. But while slower economic growth is likely to impact on new project starts, particularly in the private sector, the good news is that overall activity across the industry is set to continue expanding.”
Elsewhere, the value of new work project starts in the health sector looks set to rise by 23% this year. And, despite continued pressure, education starts are expected to rebound sharply during 2018.
Private sector housing, in the guise of ‘Build to Rent’, has also gathered pace. In 2016, project starts amounted to an impressive £750M and involved more than 5500 units – a threefold increase on 2015 – with further growth forecast for 2017.
There was welcome news for the nation’s housebuilders as well. In July, Persimmon Homes announced a robust sales period through May and June, and the market was largely unfazed by the surprise snap election. First-half completions were up 8% on the same period last year, rising to 7794 in total.
Glenigan also revealed that the supply of available development slots has greatly improved over the past three years, most notably in London and the south of England. All of which indicates a brighter outlook for construction nationwide, irrespective of any economic uncertainties.