UK new construction orders up 10% - 2005

Fresh figures show that new construction orders in the UK rose 10% in the year to November (2005) from a year earlier, according to the Department of Trade and Industry (DTI).

New orders between September and November rose by 20% compared to the same period in 2004 and by 6% compared with the previous quarter.

Increases were seen in all sectors except private housing orders and public non-housing (excluding infrastructure), the DTI said.

Private housing orders fell 11% in the three months to November from the previous three months, while public non-housing orders fell by 13%. Public housing and housing association orders, however, escalated by 40% while infrastructure orders were up 10%.

Private commercial orders rose 31% over the three months and private industrial orders dropped 11%, reports the DTI.

Firms remain optimistic despite end of year slowdown.

 Latest data from a survey conducted by Savills pointed to a seasonal slowdown in growth of commercial development activity in December. Developers reported that overall activity on both public and private sector projects was unchanged in December from a month earlier, which meant that total commercial activity failed to post an improvement for the first time since May 2003.

While the headline numbers indicated little change in activity levels at the year end, data on detailed areas of commercial activity were more positive. In December, growth was reported for all nine areas of activity on which developers are questioned, with expansion strongest for industrial/warehouse activity.

The latest survey also provided positive findings on developers’ expectations for activity levels in 2006. Optimism regarding activity levels through Q1 rose to its highest since February, as work on new office, industrial and retail developments was scheduled to begin.

Commenting on the survey, Mat Oakley, head of Savills’ Commercial Research department said: "With a third of all developers expecting to see an increase in office development starts in the first quarter of 2006, it is clear that the recovery in the leasing market is driving a new sense of optimism amongst developers. We expect office development activity to accelerate gently throughout 2006, leading to a rush of completions in two to three years time."