Project starts and detailed planning approvals experienced declines against the previous quarter and last year. More positively, growth in main contract awards on the preceding three months provided a boost to the development pipeline.
Industrial overview
During the three months to May, industrial project-starts fell 6 per cent against the preceding three months to stand 31 per cent down on a year ago, totalling £1.265bn. At £538m, major projects (£100m or more) starting on site were 256 per cent up on the previous quarter and nearly tripled on 2023 levels. Underlying industrial work starting on site (less than £100m in value) fell 29 per cent against the previous quarter on a seasonally adjusted (SA) basis to stand 56 per cent lower than a year ago, totalling £727m.
Totalling £1.515bn, industrial main contract awards increased 26 per cent against the preceding three months and stood 3 per cent down against last year. Underlying industrial main contract awards decreased 13 per cent (SA) against the preceding three months and remained 42 per cent lower than a year ago. Major projects totalled £611m during the period, a 343 per cent increase against the preceding three months to stand up on the previous year where no major projects were present.
Industrial detailed planning approvals totalled £1.936bn, having fallen 44 per cent on the previous three months to stand 31 per cent down on last year. Major project approvals slipped back 91 per cent on the previous quarter but grew 4 per cent against the preceding year to total £116m. Underlying projects totalled £1.82bn, a 23 per cent decrease (SA) on the preceding three months, and 32 per cent lower than the previous year.
Types of projects started
Warehousing & logistics work starting on site added up to £626m, a 32 per cent increase compared with the previous year. The segment accounted for 49 per cent of industrial starts during the three months to May, making it the most active segment. Other industrial projects also grew 51 per cent against the previous year, which brought the total up to £188m, a 15 per cent share of the whole sector.
Manufacturing starts, on the other hand, decreased 64 per cent against the previous year to total £451m, accounting for 36 per cent of the sector.
Regional
The East Midlands were the most active region for industrial project starts during the period. Having grown 186 per cent on a year ago, the region accounted for 35 per cent of sector starts during the three months to May, with the value adding up to £440m. Growth in the region was almost solely due to the commencement of the SEGRO Logistics Park Northampton Plot 4 development. Northern Ireland also doubled on a year ago to total £113m, a 9 per cent share of industrial project-starts.
In contrast, accounting for 15 per cent, Yorkshire & the Humber fell 16 per cent to total £184m. Accounting for a 10 per cent share, the East of England slipped back 4 per cent to total £123m. Accounting for 7 per cent, the South East faced a 67 per cent slump against last year to total £91m. At £75m, the West Midlands slipped back 69 per cent, a 6 per cent share of industrial starts.
The South East was the most active region for detailed planning approvals, accounting for a 15 per cent share of all consents, having grown 10 per cent on last year, bringing its total value up to £296m. Accounting for 13 per cent, the North West totalled £256m, having grown 9 per cent on a year ago. In contrast, accounting for the same share, the West Midlands slipped back 13 per cent against last year to total £244m.
Accounting for a 12 per cent share, the East of England also experienced a weak period, having fallen 28 per cent compared to last year, with a total of £238m. At £186m, Scotland accounted for 10 per cent of approvals, having decreased 56 per cent against last year’s levels. Accounting for 8 per cent, the East Midlands slipped back 37 per cent to total £146m.
