Subdued planning environment figures provide scant hope for house-building targets
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[edit] Construction Industry Headlines for May
Residential planning and approvals provided little hope for a short-term recovery of the market in Barbour ABI’s latest market figures, whilst contract award values continue to highlight market volatility.
[edit] Planning applications and approvals
Planning applications and approvals across the construction industry remained subdued in May after a turn for the worst in April which saw contract awards fall by a third and planning approvals at their lowest since June 2022.
Approvals are at just £6.1bn, and applications have fallen to £7.4bn, with similar trends across both, according to the latest figures from Barbour ABI.
The residential sector looks weak, with a 30% bump in April applications falling back to just £3.2bn in May and with limited recovery in approvals. This suggests there is little hope for those looking for a rally in tumbling house-building numbers in the short term.
Infrastructure also appears to have fallen over the last few months, with overall planning activity decreasing by 15-25% compared to last year. Infrastructure applications fell by 50% in May to £1.3bn compared to April, the weakest monthly value since Sept 2021.
[edit] Contract Awards
Meanwhile, contract awards provide a more complex picture, recovering by 20% compared to April with £5.6bn, in line with the long-run average – but well down from the £6.6bn per month seen over Q1 and 2022. Surprisingly Residential contract awards saw a sharp increase after a 30% fall in April.
Barbour ABI Chief Economist Tom Hall explained, “Across construction sectors, May was a strange month for contract awards as some sectors bucked recent negative trends. Residential and commercial sectors saw a welcome bounce while others suffered, highlighting the continuing see-sawing and uncertainty we have seen in recent months.
Meanwhile, the industrial sector suffered a disappointing 37% fall. May's £500m was the lowest level since last June. The infrastructure sector also seems to be on a new lower path, with the second month in a row below £1bn: the last time this happened was in 2021.”
This article is issued as a Press Release and posted by Barbour ABI dated June 9
--Barbour ABI 10:08, 09 Jun 2023 (BST)
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