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Project holds plummet to lowest level in two years

The number and value of projects put on hold has fallen to its lowest level in almost two years, according to new figures.

Business intelligence unit Glenigan recorded 198 projects being halted in May, the smallest number of stops since June 2008.

The latest figure was 73 per cent down on May 2009, when 731 projects were stopped. The value of the projects that were halted fell by 85 per cent from £4 billion in May 2009 to £583 million.

The project hold data was also a significant improvement on April’s figures, when 409 projects worth £1.7bn were stalled.

Glenigan economics director Allan Wilen said: “Hopefully we should see a continued improvement in private sector projects, both in terms of fewer schemes put on hold and more projects coming back off the shelf into production.

“Unfortunately, given the planned cuts in government funding and the review of a lot of major programmes, we may well see an increase in public sector projects being put on hold.”

The benefits of the fall in project holds were felt across the industry. The value of education projects put on hold fell by 84 per cent in the three months to May, while commercial projects fell year-on-year by 65 per cent.

Similarly, the values of shelved social housing and office projects were running at a third of the levels seen a year earlier.

While the figures must be seen in the context of the arid start to 2009, they provide a further indication of gradual recovery. However, project cancellations increased, with the value of jobs abandoned after being on hold rising over the three months to May.

Education jobs accounted for 38 per cent of all cancellations.

Meanwhile, the value of construction projects starting on site in the three months to May 2010 fell back to below 2006 levels.

The Glenigan Index for May was 10 per cent up on a year earlier but lower than the Index for March and April this year.

Residential project starts in the three months to May showed a clear divergence between private and public-funded projects.

Mr Wilen said: “The value of private housing project starts remained 58 per cent up on a year ago, while social housing developments fell back from the surge seen in the first quarter.”