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Housing identified as biggest cause of project slump

Housing project starts fell by almost a quarter in the three months to November compared to 2010, spiralling overall construction starts downwards by 10 per cent, according to the latest Glenigan index figures.

Private housing starts fell by 13 per cent but are expected to stabilise, while social housing starts fell by 38 per cent year on year.

“Further retrenchment is forecast here as the cut backs in government funding bite,” said Glenigan economist James Abraham.

Civil engineering starts were up 61 per cent, while non-housing starts in total were down 13 per cent on a year ago. The Glenigan figures show a weakness in education starts, with the value of health and community starts declining for the first time during the second half of 2011. Retail was the only sector to avoid a drop.

Regionally, the picture looked brightest for Wales, the South-east and South-west of England, and Scotland saw a year on year growth of 10 per cent.

“By contrast, over the three months to November the underlying value of project starts in Northern Ireland, the East and North-west of England fell by more than 20% and Yorkshire continues to endure a poor flow of projects reaching start on site,” said Mr Abraham