Katie Allen 

The UK construction sector – in five charts

Study shows a fall in infrastructure projects across the northern powerhouse area but the region is leading the way in housebuilding
  
  

Chancellor George Osborne delivers his speech on the ‘northern powerhouse’ project in Salford.
Chancellor George Osborne delivers his speech on the ‘northern powerhouse’ project in Salford. Photograph: Christopher Furlong/PA

Government pledges to spend more on infrastructure projects in the north of England have been coming thick and fast since the UK chancellor unveiled plans for his “northern powerhouse”. But George Osborne has a lot of lost ground to make up, according to a new analysis of construction data revealing a fall in infrastructure activity across the northern powerhouse region.

Infrastructure activity fell in London and across the combined regions where Osborne wants to create a network of northern cities to “take on the world”, according to an analysis of the latest construction data by Scape Group, a public sector-owned building consultants.

Scape also found the northern powerhouse regions recorded the strongest growth of any region in new homebuilding activity in the year to June. In contrast, London’s housing activity grew by less than 1% over those 12 months.

Here are five trends the report highlights:

Infrastructure activity falls across ‘northern powerhouse’

Although many of the cities in thenorthern powerhouse region benefitted from major road and rail projects, such as those around Manchester, Warrington and Preston, infrastructure activity overall across the area fell on the previous year, the report said.

Activity on infrastructure projects in Wales and Scotland was up significantly – with Wales doubling its spend on infrastructure, according to the analysis which was based on the most recent regional construction data from the Office for National Statistics.

London takes lion’s share of overall construction activity

When looking at the whole construction sector, including areas such as infrastructure and housing, London made up the biggest share of construction sector activity in the year to June. When taken together, the northern powerhouse regions almost match London, however.

Construction activity across north-west England, north-east England and Yorkshire and the Humber was £29.21bn in the last year, just £1.12bn less than London’s total construction output of £30.3bn, the report said.

Scotland records fastest growth

Scotland experienced the biggest overall growth in the UK, with construction activity rising by more than 20% on the previous year. “New housing and public sector work drove Scotland’s boom in construction activity, with the Scottish government’s steady pipeline of new projects providing plenty of work for Scottish contractors in the run-up to the May 2015 general election,” the report said.

“Despite large increases in housing activity, Yorkshire and the Humber saw the biggest fall in construction activity overall,” the report added.

Although Wales doubled its infrastructure output during the year, large reductions in the construction of private housing and private commercial buildings led to a small overall fall in output.

Northern housing boom

Overall housebuilding was up more than 8% on the previous year, driving the wider construction sector. There was a housebuilding boom in the north of England and collectively the northern powerhouse regions increased construction output in housing by 30%, the analysis found.

Public sector housing fall bodes ill for London affordability

There was a north-south divide on the balance between public and private housing. In south-east England, construction of public sector housing fell by 25% in the year to June, while in London there was a 32% fall.

“London and the south-east had the lowest levels of housebuilding activity in the public sector. With rental prices continuing to rise rapidly, more affordable housing is particularly needed in London and the south-east – this decrease in activity suggests fewer affordable units will be available in the next 12 months,” the report said.

 

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