A resurgence in construction activity sees the West Midlands experiencing the bounceback previously concentrated in the south-west according to the latest JLL/Glenigan construction activity index.
The region saw a 9% rise in new activity in Q2 of 2015, as oposed to a -9.2% drop in Q1. Work started was up from £1.6 billion to £1.7 billion, which JLL believes is largely due to the number of new-build starts in the industrial and logisitics market which saw the strongest individual sector performance.
Outside of the South-East, £3.2bn worth of new industrial schemes commenced over the 12 months, a 12.8% increase on the £2.8bn recorded in the Q1 figures.
This positive regional picture is reflected across the North-West and Scotland, with increases of 16.8% and 17.6%. The East of England topped the leader board with 23%.
Graham Taylor, Building Consultancy lead director from JLL’s Birmingham office commenting on the report said:
“We predicted Q2 would see a bounce back from the negative figures experienced towards the end of 2014 and Q1 of this year. It seems the major urban conurbations outside of London – Birmingham, Greater Manchester are starting to gather pace. We know from our own experience that the industrial and logistics market has really heated up, with our team at the forefront of growth brokering over 1 million sq ft of space in the past 9 months. This is largely driven by a lack of supply in the region and an increased appetite for build to suit and speculative schemes.”
The West Midlands growth is against a backdrop of slower national growth, with volumes rising 2.0%, down from the remarkable 7% recorded over the first three months of the year. This is possibly as a result of a slightly flatter London, which was down -5.3%, although the capital still accounts for a quarter of all construction activity. It’s believed growth in both construction and total output will be revised upwards as the year progresses.
A surge in post-election business and investment decision-making was noticeable and is expected to result in increased construction activity in late 2015 and throughout 2016.
Taylor concluded:”We expect markets to grow in line with stronger economic prospects over the coming years and certainly up to 2018 we will see strong performances in regional cities such as Birmingham.”