Hotel development

Hotel and office projects soften rate of decline in construction starts

The rate of declining construction starts softened during the three months to April, falling by 15% according to the Glenigan Index of Construction Starts.

This meant the value of construction starts was 12% lower than the same period in 2023.

However, Glenigan claimed the downward curve was “starting to level out”, with figures remaining “encouragingly” stable.

Glenigan attributed the softening to better figures recorded in various non-residential construction sectors, such as hotel and leisure, which saw an uptick of 11%.

The index also pointed to a 7% hike in office construction starts, 8% higher than in 2023.

The reality was less positive for residential construction where overall starts declined 16% on the previous three months, leaving them 18% lower year-on-year.

Private housing starts dipped 14%, a 17% drop from the previous year.

The data was worse for social housing, which fell by 21%, some 19% lower than in 2023.

“While the first month of Q2 remains weak, there has not been as dramatic a drop as we saw in Q4 2023,” said Glenigan economist Drilon Baca.

“Consumer confidence is gradually returning and the freeze on private investment will likely thaw should this trend continue.

“In the public sector, all eyes will be on a new government in H2 2024, with departments often increasing funding for capital projects following a post-election spending review.”

Geographically, performance was inconsistent across the UK, but most regions registered declines over the reporting period.

Northern Ireland was an anomaly, with a 20% jump in construction start values, up 33% from the year before.

Glenigan partly attributed this to a sharp boost in hotel and leisure-related activity.

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