Firm says materials shortages and supply chain disruption worsened by Ukraine war

Construction project starts are down on last year as supply chain pressures intensify, according to the latest Glenigan data.

While the value of work starting on site in the first quarter of 2022 experienced its traditional seasonal uptick 鈥 23% up on Q4 鈥 project start levels were down 24% on the first quarter of last year.

The information provider鈥檚 April construction review found that material shortages and supply chain disruption, exacerbated by the Russo-Ukrainian War, were stalling the post-pandemic recovery.

Starts on major projects fared poorly, dropping 8% compared to the last quarter of 2021 and 30% lower than a year ago.

shutterstock_2139469437

Source: Shutterstock

War in Ukraine has impacted the supply of some products

Main contract awards were 9% down during the first quarter and 16% year-on-year, whereas detailed planning approvals fell by 1% 鈥 the only silver lining being the 2% uptick in major project approvals compared with last year.

Glenigan鈥檚 economic director, Allan Wilen, said the 鈥渟hockwaves of geopolitical ructions鈥 in Eastern Europe were continue to affect the UK construction industry

But he added: 鈥淲hilst the across-the-board performance is not in the position the sector would universally like it to be, a modest dip in awards and consents indicates the appetite to build is there, and we can expect a surge in activity when supply chain pressures ease.鈥

The review, which covers all projects with a total value of 拢100m or less, also reported on sectoral trends, with office projects experiencing the greatest growth.

Starts in the sector increased 28% on the previous quarter and now stand 1% higher than the same quarter the year prior.

By comparison, residential work was 32% down on the first quarter of 2021.

Regionally, the North-east led the pack in Q1, with the value of project starts increasing 22% compared with Q4 of 2021, and 4% on the previous Q1.

Northern Ireland and Wales were the only other areas to experience growth on both counts, with the South-west performing particularly poorly 鈥 down 39% and 51% on the respective measures. Project starts in the East of England strengthened by 21% compared to the preceding three months, but levels remained 17% lower than a year ago.

Scotland fared similarly with 14% growth in Q1 2022 but 27% down on the same period in 2021.