Construction activity January 2024: North East

Detailed planning approvals, main contract awards and project starts all performed poorly against the preceding three months and last year’s figures.

North East overview

Adding up to £713m, work starting on-site in the North East during the three months to January fell 30 per cent against the preceding three months to stand 53 per cent down on a year ago. Major projects (£100m or more in value) commencing on-site totalled £150m, unchanged from the previous three months and 82 down on the previous year. Underlying project starts (less than £100m) increased one per cent against the preceding three months on a seasonally adjusted (SA) basis but fell 18 per cent compared with a year ago.

Main contract awards in the North East fell 45 per cent during the three months and decreased 50 per cent against the previous year to total £547m. There were no major project approvals during the period, a decrease from the preceding three months and the previous year. Underlying contract awards fell 18 per cent (SA) on the preceding three months and decreased 26 per cent on the previous year.

Totalling £1.1bn, detailed planning approvals decreased 33 per cent against the preceding three months and 34 per cent compared with the previous year. Underlying detailed planning approvals increased 16 per cent against the preceding three months to stand nine per cent up on the previous year, totalling £950m. Major projects granted detailed planning consents totalled £150m, 83 per cent lower compared with the preceding three months, to stand 81 per cent down on the previous year.

Sector analysis: project starts

Private housing accounted for 34 per cent of work starting on-site in the North East during the three months to January with the value adding up to £244m, making it the most active sector despite having experienced a 28 per cent decrease against a year ago. Industrial at £26m also experienced a steep decline, with the value of project starts falling 95 per cent against last year’s levels to account for a four per cent share.

Elsewhere, infrastructure accounted for a 28 per cent share of project starts, with the sector having doubled compared with a year ago to total £196m. The sector was boosted by the £150m Darlington Station Improvement Program Grip 5/ES. Accounting for 11 per cent of project starts, health also experienced a strong performance against the previous year with the value of project starts totalling £80m, having increased tenfold on a year ago. Offices jumped 791 per cent against last year to total £48m, a seven per cent share of project starts in the region.

Value of project starts in the North East during the three months to January 2024 by sector

Sector analysis: detailed planning approvals

Private Housing accounted for the largest share of detailed planning approvals (42 per cent) during the three months to January. The sector increased five per cent against last year to total £461m. Infrastructure at £167m grew nearly 14 times against last year to account for a 15 per cent share of the total value.

Hotel & Leisure at £105m also experienced a strong performance, with the value of project approvals increasing 371 per cent against a year ago to account for a ten per cent share. Social housing doubled against the previous year to total £84m, accounting for eight per cent of the total value. In contrast, accounting for a tenth of approvals, industrial slipped back 79 per cent to total £113m.

Value of detailed planning approvals in the North East during the three months to January 2024 by sector

Forecast construction starts for the North East

Note: Underlying projects are schemes with a construction value of £250,000 to £100m. Forecast updated in February 2024 p – provisional, f – forecast. Source: Glenigan