Glenigan’s analysis indicates a 48% fall in construction project starts in the fourth quarter of 2022 compared to the third quarter. They were also 20% down on 2021’s fourth quarter.

This overall drop in activity was also reflected in main contract awards, which dropped 18% against Q3, and 23% against 2021 levels.

However, some hope was to be found in a modest increase in detailed planning approvals, up 2% against the preceding three months, and 5% higher than the same period in 2021. Glenigan says that this indicates a lean first half for 2023 followed by a gradual recovery in the second half of 2023 – potentially, at least.

Major project starts – projects valued at more than £100m –have previously accounted for an uptick in sector activity but fell dramatically in Q4 2022, dropping 80% on the previous quarter and 55% compared to 2021. Project starts worth below £100m had a less pronounced decline, dipping 6% during Q4 and only 7% on the previous year.

However awards of sub-£100m contracts were down 26% on both the previous quarter and year-on-year. Major contract awards declined 19% compared to Q3 and 14% compared to 2021 levels.

Glenigan economics director Allan Wilen said: “The sector is still getting to grips with a very hostile economic climate. Prices continue to rise and access to skilled labour is falling, combine this with dented consumer and investor confidence and you have an unpleasant cocktail of challenging circumstances. It’s set to be a tough six months, requiring contractors and developers to be particularly agile and flexible to capture share in distinctly bearish markets.”

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