The construction industry experienced a 20% increase in project starts in 2024, highlighting significant resilience amid economic challenges, according to a new report.
According to Roofing Today Magazine, the construction sector experienced significant growth in 2024, with overall project starts rising by 20% compared to the previous year, as reported by Glenigan in their January 2025 Construction Review. This surge reflects an underlying increase in activity across various project sectors, despite facing economic uncertainties.
Throughout 2024, the average monthly project starts reached £10,372 million, boasting a remarkable 58% rise in major projects, signalling a renewed confidence among developers in large-scale ventures. However, overall main contract awards saw a decrease of 4% year-on-year, averaging £9,595 million per month, showcasing a cautious approach amongst developers. The decline extended to detailed planning approvals, which fell by 19% overall, and a more significant 34% drop in major projects.
In sector-specific performance, residential construction faced notable challenges, finishing 2024 with a 4% decrease compared to the previous year. Private housing starts were particularly affected, declining 9%, while a 10% drop in social housing indicated ongoing issues related to affordability and funding.
Conversely, non-residential sectors displayed mixed results. Hotel and leisure construction stood out with a robust 30% year-on-year growth, while civil engineering sectors excelled with project starts rising by 16%. Infrastructure projects increased by 17%, and utilities recorded a 14% rise. The education sector also performed well, achieving a 7% increase in starts, whilst the industrial sector saw modest growth at 4%. However, the office sector experienced a significant 19% year-on-year decline, attributed to evolving workplace trends.
Regional analysis revealed that the South East emerged as the top-performing region, with project starts increasing by 17% compared to 2023. Northern Ireland (+23%) and the South West (+13%) also experienced notable growth, alongside Yorkshire and the North West with increases of 8% and 5% respectively. Meanwhile, regions such as Scotland and the East of England faced declines, with project values falling 2% and 1%, respectively. London also reported a challenging year, with a decline of 15% overall against the previous year.
Looking ahead, Allan Wilen, Glenigan’s Economic Director, expressed a positive outlook for 2025, despite the challenges faced in 2024. He noted that the construction sector displayed notable resilience, driven by strong increases in major project starts, particularly in the renewable energy and rail sectors. Increased government and household spending, as projected by the Office for Budget Responsibility (OBR), is anticipated to provide a significant boost across key construction sectors.
Specific forecasts predict a 13% growth in project starts for private housing, with activities focused on build-to-rent and small-to-medium enterprise initiatives. The retail sector is expected to see a modest increase of 1%, benefiting from an improved economic outlook, while the hospitality industry anticipates a revival with hotel and leisure construction starts projected to rise by 6%. Landmark projects, such as the £250 million Therme UK development, are expected to further stimulate sector activity.
In the commercial sector, industrial and civil engineering are forecasted for expansion, bolstered by projects like the £8 billion Hornsea Four development and the £350 million Altalto Immingham facility. Office developments are on track for an 18% growth in starts, driven by investments in data centres, including the notable £400 million G Park Docklands Data Centre, highlighting the rise of AI and digital transformation.
Moreover, significant investments are anticipated in infrastructure, education, and health, exemplified by projects such as the £215 million Cambridge Children’s Hospital and the £80.3 million Ardrossan Community Learning and Innovation Hub. The construction industry is expected to leverage its resilience and adaptability to meet evolving demands and thrive in the upcoming year.
Source: Noah Wire Services
- https://www2.deloitte.com/us/en/insights/industry/engineering-and-construction/engineering-and-construction-industry-outlook.html – Corroborates the overall growth and challenges in the construction industry in 2024, including strong fundamentals, talent shortages, and the impact of high interest rates and price inflation.
- https://internationalbanker.com/finance/the-2024-us-construction-outlook-torrid-or-tepid/ – Supports the growth in construction spending and the shifts in demand across different segments, including residential and non-residential construction, and the impact of economic factors.
- https://www.glenigan.com/market-analysis/reports/ – Provides context on the construction market analysis and reports, which could include data on project starts, main contract awards, and detailed planning approvals, although specific 2024 data is not directly available from this link.
- https://www.noahwire.com – Mentioned as the source of the article, but does not provide direct corroboration for specific claims without accessing the specific article or report.
- https://www2.deloitte.com/us/en/insights/industry/engineering-and-construction/engineering-and-construction-industry-outlook.html – Supports the outlook for 2025, including the expected decrease in interest rates and the impact of government investments on the construction sector.
- https://internationalbanker.com/finance/the-2024-us-construction-outlook-torrid-or-tepid/ – Corroborates the mixed performance in non-residential sectors, such as the growth in hotel and leisure, civil engineering, and infrastructure projects, and the decline in the office sector.
- https://www.glenigan.com/market-analysis/reports/ – Could provide regional analysis data, though the specific regional growth figures mentioned are not directly available from this link.
- https://www2.deloitte.com/us/en/insights/industry/engineering-and-construction/engineering-and-construction-industry-outlook.html – Supports the resilience of the construction sector and the anticipated boost from increased government and household spending.
- https://internationalbanker.com/finance/the-2024-us-construction-outlook-torrid-or-tepid/ – Corroborates the forecasts for specific sectors such as private housing, retail, hospitality, and commercial sectors, although the exact figures may vary.
- https://www.glenigan.com/market-analysis/reports/ – Could provide details on landmark projects and their impact on sector activity, though specific project details are not directly available from this link.
- https://www2.deloitte.com/us/en/insights/industry/engineering-and-construction/engineering-and-construction-industry-outlook.html – Supports the overall positive outlook for 2025, driven by strong increases in major project starts and investments in various sectors.
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