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New Construction Projects Down 19%

The flow of new construction projects was at a two year low in December down 19 per cent on a year ago according to the January Glenigan Index. Published monthly by Glenigan, the leading providers of business intelligence on the UK construction industry, the Index monitors and tracks the value of all new construction projects across the UK to provide a definitive guide to trends and forecasts for the construction industry. Furthermore a sustained fall in new projects in the pre construction pipeline does not bode well for 2009.

“The fallout from the credit crunch means access to project finance remains very difficult, even for those developers with a sound financial position,” says Allan Wilén, Economics Director, Glenigan. “Glenigan has recorded a major contraction in the value of projects obtaining planning approval which will have a significant impact on the flow of new projects during the first half of 2009.”

The decline was consistent across nearly all of the UK with only the South East and Northern Ireland showing a slight improvement in the value of new construction starts. In comparison the North East and East Midlands have been the worst affected regions with the value of new construction starts falling over a third on a year ago.

The Residential index fell 23 per cent in December on the previous year with further deterioration expected as an increasing number of residential projects are put on hold.

Private sector construction has also fallen steeply and is down 23 per cent compared to last year. The office sector has been the worst affected with the flow of new projects now less than half the value it was a year ago.

More positive new comes from the Civil engineering index which has improved 16 per cent compared to a year ago due to the start of several renewable energy projects. Whilst the sector is likely to face a difficult 2009, several water and energy utilities companies are set to press forward with their investment programmes in the New Year.

The Glenigan Index is based on Glenigan’s extensive database of construction projects, and tracks the monthly flow of construction projects valued from £100,000 up to £100 million starting on site each month.

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