Projects on hold increase in January

The value of underlying projects being placed on hold increased in the first month of the year by 15% to £750m, compared to £654m in January 2012; the increase in projects on hold is consistent with Glenigan data on project starts that showed new construction work was weaker for the three months to January, falling by 18% compared to the same period last year. 

Chart 1: Value of Projects on Hold

The private housing sector accounted for the largest proportion of new projects placed on hold, the value of such projects jumped from £167m in January 2012 to £259m in January, or 26% of projects on hold to 35% of projects on hold. The large jump comes as a surprise as private housing is seen by us as one of the more promising sectors when viewed in terms of project starts and planning approvals. However the sector did show other signs of weakness in January, in our latest starts data new private housing work was down 4% in the three months to January compared to the same period last year.

The civils sector, which performed particularly badly in January’s Glenigan index of starts data, saw very few projects placed on hold over January, only about £6m between both infrastructure and utilities  sectors. 

Regionally those projects placed on hold were concentrated in those regions that suffered the worst of January’s bad weather, the Midlands, North and West of England. The North East saw the value of projects placed on hold increase by more than four-fold in January this year compared to last year. The midlands saw projects on hold increase by three fold and four-fold in the West and East respectively over the same period. However the value of projects placed on hold in London and the South East was at about half of the levels seen in January 2012.