While project-starts weakened, strong growth in major project contract awards and detailed planning approvals boosted the development pipeline in Q4 2022.
South West overview
Work commencing on-site in the South West added up to £1.27bn during Q4 2022, a 24 per cent decline compared with the preceding quarter to stand 30 per cent lower than a year ago. There was a total absence of any major (over £100m in value) projects starting on-site during the period, differing from both the preceding quarter and previous year. Underlying project-starts (less than £100m) experienced a mixed performance, increasing 13 per cent against the preceding quarter on a seasonally adjusted (SA) basis to stand 1 per cent down on a year ago.
In contrast, main contract awards more than doubled (+105 per cent) against the preceding quarter and climbed 27 per cent against the previous year to total £3.82bn. Growth was almost entirely due to major project contract awards which, at £1.88bn, increased 436 per cent against the preceding quarter and 477 per cent against the previous year. Underlying contract awards advanced 13 per cent (SA) against the preceding quarter but remained 27 per cent lower than 2021 levels.
At £2.79bn, detailed planning approvals increased 39 per cent against the preceding quarter and 9 per cent against 2021 levels. As with main contract awards, growth was entirely due to major projects which, at £962m, increased 48 per cent against the preceding quarter and 72 per cent against the previous year. Adding up to £1.82bn, underlying detailed planning approvals dropped 31 per cent (SA) against the preceding quarter to stand 8 per cent lower than a year ago.
Sector analysis: project starts
Project-starts for most sectors experienced declines against the previous year. However, private housing bucked the national trend with project-starts advancing 42% against the previous year to total £722m. Private housing accounted for over half (57 per cent) of the region’s total value, with project starts including a 110-unit development in Somerset. Despite only accounting for a 2 per cent share of the total value, community & amenity experienced a four-digit increase on 2021 levels to total £31m.
Education also performed relatively well, with project-starts experiencing a 7 per cent increase against 2021 levels to total £133m. Education was the second-most active sector in the region, accounting for a 10 per cent share of project-starts. In contrast, infrastructure performed particularly poorly with project starts falling 86 per cent against 2021 levels to total £48m, a 4 per cent share of the total value. Health (-90 per cent), social housing (-67 per cent), offices (-62 per cent) and industrial (-56 per cent) all suffered very heavy falls in project-starts against the previous year.
Value of project starts in the South West during Q4 2022 by sector
| Sector | Value of Project-Starts (£m) | Change on previous year | Change on two years ago | %Share |
| Private Housing | 722 | 42% | 26% | 57% |
| Education | 133 | 7% | 236% | 10% |
| Hotel & Leisure | 85 | -22% | 581% | 7% |
| Offices | 73 | -62% | -17% | 6% |
| Social Housing | 50 | -67% | 78% | 4% |
| Infrastructure | 48 | -86% | -32% | 4% |
| Industrial | 45 | -56% | -28% | 4% |
| Retail | 32 | 7% | -20% | 2% |
| Community & Amenity | 31 | 1225% | -32% | 2% |
| Utilities | 27 | 58% | -94% | 2% |
| Health | 24 | -90% | -87% | 2% |
| Total | 1,270 | -30% | -20% |
Sector analysis: detailed planning approvals
As with project-starts, private housing was dominant in terms of detailed planning approvals in the South West during Q4 2022, accounting for 43 per cent of the region. Despite its dominance, private housing experienced a relatively poor period with project approvals falling 4 per cent against the previous year to total £1.21bn Hotel & Leisure, accounting for 2 per cent, also experienced a weak period with the value having declined 63 per cent compared with the previous year to total £62m.
Infrastructure detailed planning approvals, accounting for 28 per cent of the region, experienced four-digit growth against the previous year to total £782m during the quarter. Growth was almost exclusively due to the consent of the new £460m ‘A417 Missing Link’ in Gloucestershire. Industrial was another strong growth area, with approvals experiencing a 65 per cent increase to total £275m, a one tenth share of the total value.
Value of detailed planning approvals in the South West during Q4 2022 by sector
| Sector | Value of Project-Approvals (£m) | Change on previous year | Change on two years ago | %Share |
| Private Housing | 1,206 | -4% | 39% | 43% |
| Infrastructure | 782 | 3066% | -56% | 28% |
| Social Housing | 275 | 65% | 160% | 10% |
| Industrial | 190 | 42% | -12% | 7% |
| Health | 111 | 55% | -32% | 4% |
| Hotel & Leisure | 62 | -63% | 10% | 2% |
| Offices | 48 | -75% | -48% | 2% |
| Education | 41 | -76% | -58% | 1% |
| Retail | 34 | 15% | -3% | 1% |
| Utilities | 30 | -47% | 40% | 1% |
| Community & Amenity | 6 | -98% | -44% | 0% |
| Total | 2,785 | 9% | -19% |
Forecast construction starts for the South West
| Underlying project-starts (£m) | Change on previous year | |
| Quarter 1, 2021 | 1,822 | 16% |
| Quarter 2, 2021 | 1,618 | 94% |
| Quarter 3, 2021 | 1,443 | 29% |
| Quarter 4, 2021 | 1,286 | 0% |
| Quarter 1, 2022 | 1,502 | -18% |
| Quarter 2, 2022 | 1,783 | 10% |
| Quarter 3, 2022 | 1,447 | 0% |
| Quarter 4, 2022 p | 1,217 | -5% |
| Quarter 1, 2023 f | 1,522 | 1% |
| Quarter 2, 2023 f | 1,444 | -19% |
| Quarter 3, 2023 f | 1,447 | 0% |
| Quarter 4, 2023 f | 1,325 | 9% |
| Quarter 1, 2024 f | 1,568 | 3% |
| Quarter 2, 2024 f | 1,530 | 6% |
| Quarter 3, 2024 f | 1,566 | 8% |
| Quarter 4, 2024 f | 1,466 | 11% |
Note: Underlying projects are schemes with a construction value of £250,000 to £100 million. Forecast updated in June 2022 p – provisional, f – forecast. Source: Glenigan
Glenigan – celebrating its 50th anniversary this year – is CN Intelligence’s partner for UK construction project data, market analysis and company intelligence.
Glenigan combines comprehensive information gathering with expert analysis to provide intelligence on all construction sectors, including private and social housing, education, health, hotel and leisure, industrial, infrastructure, offices, retail, and utilities, and across all regions of the UK and Ireland.
Find out more: www.glenigan.com
