Planning approvals spike despite falling project starts, says Glenigan

Planning approvals spiked in the three months to April despite continuing weakness in construction starts. 

According to analyst Glenigan, detailed approvals grew 65% on the preceding three-month period, standing 27% up against 2022 levels. 

The firm’s latest construction review painted a mixed portrait for the industry, with project starts down more than a third against the previous year and main contract awards down 10% on the previous three-month period. 

Glenigan’s economic director Allan Wilen said: “Whilst recent forecasts have made for sobering reading, the dramatic uptick in detailed planning approvals should be welcomed, indicating that work is once more streaming back into the pipeline.  

“However, with a twelfth consecutive hike in interest rates on the cards, the road to recovery is set to be a rocky one, evidenced by poor project-starts performance and another fall in main contract awards.  

“We will have to wait for these rates to soften considerably before we see a semblance of a return to normal levels of activity.” 

While planning approvals for smaller residential projects fell back 8% in the three months to April, approvals for major jobs doubled on the previous quarter. 

Positive planning approval figures were posted across other sector, including offices, hotel and leisure, industrial, health and civil engineering. 

Offices and the hotel and leisure sector also saw positive planning approval figures, 8% and 58% on the previous period, respectively.  

This is despite falls in underlying project starts across almost every sector. Education was the only sector to experience growth across the period, with increases on the three months to April (+9%) and against 2022 figures (+23%). 

Regional performance was also dismal, with the North-east suffering the heaviest decrease – project starts falling during the three months to April to stand 27% down on a year ago. 

Wales was the only region to experience growth against the previous year, increasing 13%, but falling back 12% against the preceding three months.