Sectors to Watch as Planning Approvals Rise
Posted by Glenigan on 4th October 2023 -
A marked upturn in detailed planning approvals over the summer provides useful pointers to key sectors across the industry where new work opportunities will be strongest in the year ahead.
Promising sectors where approvals have been rising include major projects in the health, education, and civil engineering whilst the work pipeline on larger office schemes and the wider retail sector has also received a boost.
The September Glenigan Construction Review highlights a 27% increase in detailed planning approvals across the whole industry in the three months to August, compared to the period a year ago. Major projects (worth over £100 million) enjoyed the strongest growth with approvals worth more than double the period a year earlier.
Given the mixed economic outlook, underlying planning approvals (under £100 million) across the industry dipped only 6% on the period last year.
Star performer
Health stood out as a star performer over the summer. Detailed planning approvals were worth £3,196 million over June-August, up 28% on the previous three months and more than double the period a year earlier. Approvals on major health schemes saw the strongest growth as the hospital building programme gathered momentum, rising 51% on the previous period to stand nearly six times higher than a year ago.
One major scheme in the sector where tenders have recently been returned is the £220 million Cambridge Cancer Research Hospital (pictured) involving over 27,000 square metres of space where work is set to start next spring and run for 30 months (Project ID: 21561465).
The longer-term work prospects for large-scale projects in the education sector also brightened over the summer. Detailed planning approvals for major education projects were worth £420 million over June-August, double the level of a year ago and boosted by the go-ahead for major schemes in Wales and London.
Frameworks will offer some significant opportunities for contractors in the education sector over the coming months. Essex County Council, for example, is inviting tenders for main contractors on its Construction Framework 3 for work on schools in the county which will be worth £400 million over four years from its start date early next year (Project ID: 23283639).
Boost to work pipeline
The work pipeline for large-scale civil engineering contracts also received a boost over the summer. Detailed planning approvals for major civil engineering schemes were worth £7,701 million over June-August, up 35% on the previous three months and a near five-fold increase on the period a year ago.
The go-ahead for the £2.7 billion Hornsea Project Four offshore windfarm (Project ID: 16095472) boosted the value of major civils approvals in Yorkshire & Humberside whilst the green light for the £1.3 billion A303 Stonehenge road tunnel lifted the total for the South West (Project ID: 93148284). The North West, East Midlands and North East all saw significant increases in the value of civil engineering approvals too, which bodes well for future workloads in these regions.
Larger office schemes stand out as one sector where the work pipeline is stronger. Detailed planning approvals for major office schemes across the country during the June-August quarter were worth £1,552 million, up 82% on a year ago.
London is inevitably the site of many of the larger office schemes in the pipeline. One major scheme in the capital where outline plans have been submitted is the £706.6 million G Park Docklands -Data Centre in north Woolwich where work is pencilled in to start in autumn next year (Project ID: 23119996)
Meanwhile, some signs of an upturn in the battered retail sector are emerging as businesses adapt their premises to meet evolving consumer trends. Detailed retail planning approvals were worth £451 million over June-August, up 49% on the period a year ago. The North West, London and the East of England all saw an upturn in retail detailed planning approvals.
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Glenigan
Glenigan is the trusted provider of construction project sales leads, industry data, analysis, forecasting and company intelligence. Glenigan combines comprehensive data gathering and exhaustive research with detailed statistical modeling and expert analysis .
