By Daniel Hunter

Residential and civil engineering construction projects starting on site increased in the three months to February to boost the underlying year on year value of total construction project starts by 17% according to the latest data from construction industry analyst Glenigan.

The underlying value of private housing construction project starts increased 42% year on year for the three months to February. Growth has been concentrated in London, the South and East of England. Scotland, the East Midlands and Yorkshire & the Humber saw declines in housing starts.

"Glenigan forecast private housing starts to remain buoyant over the coming months despite the increase being exaggerated by the impact of the severe winter of 2010/11 on project starts," James Abraham, economist, Glenigan, commented.

Civil engineering project starts increased 63% year on year for the three months to February.

"Utilities and infrastructure sectors saw significant increases in project starts with investments in rail projects in London and the South of England and heavy investment in Scottish utilities projects including recycling plants and wind farms," Abraham added.

"Government spending cuts will continue to restrict new health, education and social housing projects leading to an increase in refurbishment work this year. The flow of civil engineering projects is expected to remain steady because the Department for Transport's budget was saved from the larger scale cuts imposed upon other departments in the Comprehensive Spending Review.

"While industrial and office building has returned to growth, the sustainability of this growth depends on domestic and international economic prospects. Retail construction prospects, buoyed over the last two years by supermarket expansion, will shift as firms refurbish or extend current stores. Private housing construction has recovered following the declines seen over 2011; however the rate of growth will be hampered by poor household earnings growth and potentially flat house prices."

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