By Daniel Hunter
The Glenigan Index for the three months to March was down by 21% compared to March 2012 as project starts fell for a third consecutive month.
The overriding theme of this month's data is once again weakness in private sector starts; the pace of decline seen last month quickened in the private housing, industrial and retail sectors. In contrast to this project starts in the health, education and other public building sectors all continued to increase.
"The poor start to the year continued in March as the rate of decline in starts quickened," said Glenigan Economist Andrew Whiffin.
"Some sectors reliant on public funding actually improved; starts in health, education and other public building were up on a year ago. However the fall in private sector activity far outweighed these gains. Private housing, industrial and retail starts all saw the rate of decline accelerate, pointing to faltering investor confidence."
Retail was the worst performing sector this month; the value of starts during the three months to March were half that of a year ago. While new supermarket projects are still providing the lion's share of starts, the value of these projects is well below what was seen last year and work from other retail subsectors has almost dropped away completely.
Industrial starts were also weak, down 42% in the three months to March. One of the best performing areas last year, the industrial sector has been badly hit by the lack of logistics and warehousing projects getting underway during the past three months.
The residential sector also performed badly in the latest data, starts for private housing projects fell by 24% in the three months to March and social housing starts were down 48% in the same period.
"The fall in private housing starts is particularly disappointing. However, the additional measures announced in last month's Budget should go some way to stimulating construction activity in the private housing sector and we do expect some improvement as 2013 progresses," added Whiffin.
Join us on