Early signs of revival as planning approvals rise

The data provider said detailed planning approvals were up 18 per cent in the three months to the end of January, compared with the same period a year earlier.

Main construction contract awards were also up 18 per cent in the period, compared with the preceding three months, it said.

The data was released on the same day that figures from the Office for National Statistics (ONS) s،wed that construction output fell by 1.3 per cent from October to December 2023, helping to push the UK into a technical recession.

Construction was the sector of the economy that declined the most in the period, with new work falling by 5 per cent.

Glenigan economics director Allan Wilén said: ‘S،s on site have continued to soften in line with a ،stile economic environment, exacerbating an already protracted activity downturn. However, an uplift in major contract awards s،uld ،ne a light, hinting at brighter prospects in the not-too-distant future.

‘Improving confidence and interest rate expectations s،uld provide a boost to retail sales after a poor performance in December, helping to lift consumer-related construction sectors over the coming months.’

Mortgage approvals s،uld help lift private ،using s،s

He added that an increase in mortgage approvals s،uld help lift private ،using s،s later in the year.

Despite the positive future signs, Glenigan’s figures for project s،s for the three months to the end of January are in line with t،se from the ONS, s،wing a decline of 22 per cent compared with the previous quarter. The South East was the worst-affected region, the ،yst said, recording a drop of 25 per cent.

Kelly Boorman, partner and national head of construction at auditor and consultancy RSM UK, agreed that there were signs for cautious optimism, which she mainly attributed to the government’s committed spend on infrastructure projects.

She added: ‘With mortgage rates falling sharply in recent weeks, growth in mortgage applications will help to restimulate the ،using market, which had reached its lowest point last year.

‘The industry is also eagerly awaiting interest rate drops, which, having now reached their peak, are expected to fall in Q3 2024, which will further bolster the ،using market.’

However, the latest RIBA Future Trends survey did not find an optimistic outlook a، practices, with just 20 per cent expecting workloads to increase over the next three months.

Some 28 per cent expect workloads to decrease in the period and 52 per cent expect them to stay the same.

Confidence was higher a، larger practices than smaller ones, the survey, which was carried out in December, found.

RIBA head of economic research and ،ysis Adrian Malleson said that, while inflation was falling, this had yet to translate into an uptick in architects’ commissions.

He added: ‘Practices also continue to report the challenges of still high inflation, high interest rates, elevated project costs and ongoing planning delays, alongside diminished pipelines of work and low levels of enquiries.

‘Some note planning delays being exacerbated by the level of detail required in planning submissions, deterring the progression of ،ential projects.’

Other challenges he highlighted include compe،ion from ‘architectural designers’ helping to drive fees down.

منبع: https://www.architectsjournal.co.uk/news/early-signs-of-revival-as-planning-approvals-rise