NEWS / Infrastructure Intelligence / Construction starts up 20% in 2024

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21 JAN 2025

CONSTRUCTION STARTS UP 20% IN 2024

Construction project starts were up by 20% in 2024 compared to 12 months earlier, according to a new data report from Glenigan.

The January 2025 edition of its Construction Review focuses on the 12 months to the end of 2024, giving a detailed analysis of year-on-year construction data.

Despite significant economic turbulence, it said 2024 emerged as a “pivotal year” for construction, driven by significant gains in major project-starts and steady growth in underlying activity.

Overall, work commencing on-site averaged £10,372m per month, up 20% from 2023.

Major projects (£100m or more) saw a 58% increase, underscoring renewed confidence in large-scale developments.

Underlying project-starts – those £100m or less - edged up by 1%.

Among the strongest performing sectors was underlying (£100m of less) hotel and leisure construction starts, which soared by 30%, while underlying education projects rose 7%.

Civil engineering also flourished, with infrastructure (+17%) and utilities (+14%) leading the charge.

The South-east emerged as the UK’s growth leader with a 17% increase in underlying project-starts.

Northern Ireland (+23%) and the South-west (+13%) also outperformed, while London faced challenges with a 15% decline.

However, main contract awards dipped 4% year-on-year, averaging £9,595m per month, reflecting caution among developers.

Underlying awards decreased by 5%, while major projects also saw a 4% drop compared to 2023.

Detailed planning approvals also struggled, falling 19% overall, with major projects hit hardest at a 34% decline. Underlying approvals dropped by 6%.

Residential construction starts experienced a challenging year, finishing 4% lower than 2023 levels.

Plus, private housing starts were down 9% compared to 2023, while social housing declined 10%, highlighting ongoing affordability and funding challenges.

Allan Wilen, Glenigan’s economic director, said: “While 2024 brought challenges, the construction sector demonstrated remarkable resilience, supported by strong gains in major project-starts including renewable energy and rail projects.

“Despite budget constraints and concerns over tax changes dampening growth in late 2024, the outlook for 2025 is positive.

“Increased government and household spending, as projected by the OBR, will likely provide a much-needed boost across key construction sectors, particularly private housing, retail, and leisure.

“Private housing is expected to see a 13% growth in project starts, with build-to-rent and SME-focused initiatives broadening development activity. Retail projects, while modestly forecasted to grow by 1%, are set to benefit from a more positive economic outlook.

“The hospitality industry is poised for a revival, with hotel and leisure construction starts predicted to rise by 6% with landmark projects like the £250m Therme UK development providing an additional boost to sector activity.

“Elsewhere, industrial and civil engineering sectors are set to expand, driven by projects such as the £8bn Hornsea Four development and £350m Altalto Immingham facility.

“Meanwhile, office developments are on track for an 18% growth in starts, with investment in data centres, including the £400m G Park Docklands Data Centre, reflecting the rise of AI and digital transformation.

“This broad-based growth presents opportunities for contractors to capitalise on emerging trends, especially as major investments in infrastructure, education, and health - such as the £215m Cambridge Children’s Hospital and the £80.3m Ardrossan Community Learning and Innovation Hub - gain momentum.

“With resilience and adaptability, the industry is well-positioned to meet these demands and thrive in 2025.”

 

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