The JLL & Glenigan UK Commercial
Construction Activity Index

First Look: Q3 2017

Long-term decline in construction activity
tempered by recent growth

The outlook for the UK commercial construction sector continues to be impacted by general economic and business uncertainty. The economy is lacking momentum, with expectations for growth falling further to 1.5% both this year and next. Within this, the construction sector has been particularly stagnant, with output falling by 0.8% in the most recent 3-month period.

In spite of the current downturn, the construction sector remains broadly optimistic about future growth. While greater caution by private investors in commercial projects is likely in the short-term, volatility in the sector may be offset by public investment and the diminishing effect of the initial post-Brexit reaction.

Commercial construction in Q3
Commercial construction in Q3

Commercial construction in Q3

New builds in Q3
New builds in Q3

New builds in Q3

Q3 2017 Sector Dynamics

The growth was predominantly driven by the core commercial sectors, which combined to reach £7.4 billion in the 12 months to the end of September, an increase of 11.3%. The retail sector was the strongest performer, growing 28.4% to £1.9 billion, followed by industrial with growth of 8.2% to £1.5 billion and office which was up 5.7% to £4.0 billion.

Offices
Offices
Retail
Retail
Hotels
Hotels
Industrial
Industrial
Medical
Medical
Education
Education
Community
Community

The picture across the UK

There was an uptick in activity across the regions. Regional activity now accounts for a 59.2% share of the total, up from 55.7% in Q2. The West Midlands was the largest driver, as activity increased 69.8% to £1.0 billion, with £200 million of Commercial & Student Accommodation starting on-site in Birmingham. Wales was another strong regional performer, with construction increasing 68.2% to £0.8 billion. This is a result of the on-site start of a new £350 million Critical Care Centre in Cwmbran. In the East Midlands activity was up 39.6% to £1.1 billion, with a £625 million Research & Development Centre starting on-site in Loughborough.

Click on the circles to see the city indexes by region

Scotland
Scotland
North East
North East
Northern Ireland
Northern Ireland
Wales
Wales
South West
South West
London
London
East of England
East of England
South East
South East
Yorkshire & Humber
Yorkshire & Humber
East Midlands
East Midlands
West Midlands
West Midlands
North West
North West

Q3 2017

East Midlands 17.6%
East of England 39.6%
London 1.4%
North East 12.2%
North Ireland -36.0%
North West -3.2%
South East -4.9%
South West 20.6%
Scotland -15.5%
West Midlands 69.8%
Wales 69.2%
Yorkshire & Humber 10.9%