Whilst JLL and Glenigan’s newly published Commercial Construction Index shows the West Midlands is still significantly down on non-residential construction in Q1 of 2015, a clear bounce-back is expected in the second half of the year.
The West Midlands fell -9.2% against an overall rise of 7.9% for new build and existing projects in the first three months.
Strong regional divergence was evident as confidence varied across the country. New building increased most in Yorkshire & the Humber (30.6%) during Q1, boosted by the Hammerson’s Victoria Gate scheme in Leeds. The East Midlands also put in a strong performance with a 24.2% rise, whereas the Northwest fell (-14.2). The Greater South-East (London, the South East and East of England) saw volumes rise 7.3%.
Graham Taylor, Building Consultancy lead director from JLL’s Birmingham office commenting on the report said: “The election had a clear impact up to May of this year, with developers failing to push the button on large scale projects. Now with the conservatives back in power and five years of perceived continuity ahead we believe there are signs there could be a bounce back in the West Midlands in the second half of 2015.
“A more financially stable environment is ahead and more positive indicators are being seen in the planning pipeline which should really start to impact on the figures towards the back end of this year.”
However, with the well-documented shortage of ‘trades’ continuing to present a real problem across the country, Graham Taylor offers a note of caution.
“More projects coming through is great for the figures and local economy but clearly for those who don’t have contingency plans to deal with a lack of bricklayers, electricians and demolition teams, delays will be inevitable. The result is contractors are being increasingly cautious about the jobs they are going for and cherry picking the best ones. Addressing this skills shortage will be vital to ensuring long term prosperity in the industry.”
Volumes stood at £1.6 billion in the West Midlands down from £1.8 billion in the last quarter of 2014. The East Midlands was £1.3 up from £1.0 billion in the same period.