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Last Updated:
15th July 2013
Underlying value of construction projects starting on site. (Excludes individual projects of more than £100 million and framework agreements).
The community and amenity sector has suffered as local authorities and government departments have diverted capital spending away to more politically sensitive areas. The value of underlying project starts fell by 27% last year with sharp declines in underlying starts were recorded in every quarter during 2012. The largest declines last year were seen in construction of local government buildings, such as council offices and town halls.
The first six months of 2013 have been more promising for the sector and starts increased in both the first and second quarters of this year. The gains in the first six months of the year saw a revival in just the type of work that led the decline last year; local government office and town halls, strong gains have also been recorded this year in project starts for new police stations as well as refurbishment of existing stations.
The outlook for 2013 is positive and we expect to see further gains in starts for the sector. However the June Spending Round announced that the Department for Communities and Local Government capital budget would be subject to severe cuts in the 2015-16 spending year; the DCLG budget will be reduced to £3.1bn from £4.8bn in the final year of this parliament. The planned reduction in capital spending does not bode well for the sectors longer term outlook and further declines are likely on the more distant horizon.
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