A pipeline workload of 32 million sq. ft. of commercial floor space and 33,000 new homes, together with 2,000 acres of development land, point to healthy future for London construction activity according to new research from Drivers Jonas Deloitte.
The predictions come as construction buyers reported their highest growth rate in nearly a year last month as confidence in future prospects also continued to rise. Managers’ Index show construction output rose in February for the 14th month in succession. The index jumped to 54.3 from 51.4 in January where anything above Latest figures from the Markit/CIPS Construction Purchasing 50 represents an increase in output.
Meanwhile Drivers Jonas Deloitte will next week launch its‘Future London Map’ which details the changes that Deloitte predicts London could see over the coming years.
Anthony Duggan, Partner and Head of Research, Drivers Jonas Deloitte said: “This map highlights the exciting future shape and direction of London over the coming years. With over 32 million sq. ft. of floor space marked on the map and a further 2,000 acres of development in various stages of planning, London will continue to march forward as a key world city. Infrastructure projects also continue apace with Crossrail, the East London Line Extension and the Emirates Line cable car underway as well as future projects such as High Speed 2 and the Northern Line Extension planned. The map shows that, despite the difficult economic and financial conditions, development and infrastructure in London remains active.”
The map includes key development sites, progressing schemes and current and future transport infrastructure improvements. It takes in the area stretching from White City and the planned HS2 station at Old Oak Common in the west to the Royal Docks and Woolwich Crossrail station in the east. Included are commercial schemes of over 500,000 sq. ft., residential schemes over 750 units, large sites of significant interest and key regeneration areas. Sites include:
White City Regeneration area; Earls Court ;New Covent Garden Market ;Battersea Power Station; Aylesbury Estate; King’s Cross Central; Greenwich Peninsula; Wood Wharf ;Queen Elizabeth Olympic Park; and Silvertown Quays.
In other positive news the construction purchasing survey figure puts the index at its highest reading since March 2011.
But the survey of buyers sentiment is add odds with the latest orders figures for the last quarter of 2011, which show new work falling to a 30-year low reports Construction Enquirer.
New construction orders last year fell 14% compared to 2010, and dropped to the lowest level since 1980, with the largest decreases being in other public new work (35%) and public new housing (28%).
Infrastructure orders rocketed 42% in the fourth quarter of 2011 compared to the preceding three months, while new public housing plummeted 27%.
David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: “The construction sector’s relatively buoyant start to 2012 continued in February, as sustained growth affirmed the industry’s on-going recovery from the financial crisis in 2008.
“However, the increase in new work from sizeable contracts was tempered by the moderate dip in overall employment.
“This has not dampened confidence, however, which is at the second highest level seen in 21 months owing to greater visibility of contracts down the pipeline.
“Commercial construction remains the star performer but housing continues to be subdued.
“This is symptomatic of weak demand that has been prevalent in the market. This week’s Bank of England mortgage lending figures, however, bode well for better housing performance ahead.”
Sarah Bingham, Economist at Markit and author of the UK Construction PMI said: “The slowdown in UK construction sector output growth recorded in January was reversed in February, with a solid increase in activity indicated.
“This was despite potential headwinds caused by poor weather conditions. The rise in output was supported by a stronger commercial expansion. Residential construction and civil engineering activity also increased, rebounding from contractions last month.
“Perhaps more encouraging was the sharp increase in new business received, which should keep firms busy in the coming months.
“Reports of rising tender opportunities and greater visibility over potential new work flows also helped to boost confidence about the year ahead, which rose to a nine-month high.
“The improved performance of the construction sector adds to other positive data released on the UK economy.
“However, it remains to be seen whether GDP growth for the first quarter will be recorded and, if it is, any expansion is likely to be only modest as general economic conditions remain fragile.”
