The JLL and Glenigan UK commercial construction activity index Q4 2018

The JLL and Glenigan quarterly UK Commercial Construction Activity Index provides an overview of commercial construction activity across the UK, highlighting the volume of total construction and new starts in different regions and across different sectors.

Commercial Construction starts in Q4 2018 continued to grow but Brexit uncertainty hurt market sentiment and undoubtedly, led to a delay in starts in Q1 2019.  Employment across the sector grew at its slowest rate for two and a half years.

In the sixth quarter of consecutive growth, JLL and Glenigan’s research teams’ business intelligence report provides a clear summary of the volume of UK Construction new builds and fit-out starts across the UK in Q4 2018. 

Sector dynamics

Benchmarking a variety of sectors including: Community, Education, Hotel, Healthcare, Office, Retail and Industrial, the report shows the trends up and down across the whole of the UK.  While the Medical sector remained still, the Community and Retail sectors saw small rises in project starts of around 2% on the previous quarter.  Education and Offices were down slightly on Q3 at -1.2% and -5.5% respectively.

The picture across the UK

Locations showing an uplift in overall starts in this quarter were Scotland with over £3bn of investment, West and East Midlands, South East England, North East and North West all showing uplift in overall starts.  East of England volume of starts almost doubled on last quarter at +98.2% and Yorkshire and Humber showed signs of a rising confidence with an increase of more than 21%.

Industrial and Hotels proved to be the biggest movers for growth during Q4 2018 and Scotland drove an overall rise in Construction starts.

Key developments

AstraZeneca’s £600m research and development centre in Cambrige; the £250m redevelopment of the Royal Liverpool University Hospital and the £100m restoration of College Library at the Glasgow School of Art, were all significant boosts to their local Construction activity and a key part of the large increases registered in Scotland, West Midlands and East of England since the end of 2017.

Although growth has been steady for the preceding five quarters, current construction starts remain around 15% lower than the 10-year average and have still to recover from a sharp drop in activity in the second half of 2016.