The latest figures show a national fall of 21 per cent in the total value of new construction projects with residential projects down 31 per cent.
But, in the East Midlands the value of project starts is down 50 per cent compared to a year ago according to the monthly Glenigan Index.
Allan Wilén, Economics Director at Glenigan, said: “Construction in every part of the UK has been affected by the fallout from the credit crisis.
“While the Bank of England’s decision to slash the base rate may help rekindle confidence and money market liquidity in due course, we anticipate a further weakening in new project starts over the next nine months, which will continue to be a drag on industry output into 2010.”
Glenigan anticipates a continued weakening of the Index well into the first half of next year with UK construction starts expected to remain below pre-credit crunch levels over the next two years.
According to Glenigan's figures private housing and non residential construction continues to decline but, civil engineering has increased by eight per cent compared to a year ago. This is primarily due to the government’s commitment to developing renewable energy options.
Glenigan says the housing market has been damaged by reduced access to finance and job insecurity with prospects for any improvement remaining bleak.
With house builders scaling back their commitments there had been hopes that social housing would deliver a boost especially following a Government commitment to bring spending forward in this sector.
Unfortunately at the moment there is no sign of this bearing fruit and the sector’s prospects are not expected to improve until house prices stabilise, which is unlikely to happen for at least four or five months.
Meanwhile, non-residential projects are down 20 per cent year-on-year as a result of the sharp reduction in construction starts in the office and industrial sectors.
The value of public sector construction starts, including education and health projects, has also weakened.
Although this sector is likely to continue to struggle in the near term, investor confidence is expected to stabilise during 2009, while new health and education projects in the pipeline should result in a modest improvement in the sector from the third quarter of 2009.
The monthly Glenigan 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.
The 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