Featured Region: South West

South West Construction (£ million). Underlying value of construction projects starting on site. (Excludes individual projects of more than £100 million and framework agreements).

The South West consists of the following Counties: Channel Islands, Isles of Scilly, Avon, Cornwall, Devon, Dorset, Gloucestershire, Somerset, Wiltshire.

The South West recovered from a difficult period last year with a 20% increase in the value of project starts. This growth has been sustained into 2012, but there is a risk that the positive trend may not continue through to next year.

The reduction in government budgets has hit the number of planned projects – this can be seen in both official ONS and Glenigan data. In 2011 the health sector was a big source of growth in project starts, for example. This is unlikely to be repeated in the future.

Much depends on the private sector to fill the gap left by the removal of public funding. The house market has been strong in the South West this year, relative to the rest of the UK, and we anticipate an increase in private housing starts in the future. Office starts have also been buoyant of late, but retail and industrial investment has been disappointing.

However, we expect the value of starts to fall by 14% next year, following the 22% increase anticipated for 2012.