Featured Sector: Education

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

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Education had been one of the strongest performing construction sectors over the post-credit crunch years. The sector was buoyed by a strong government investment programme centred on the now cancelled Building Schools for the Future (BSF).

Glenigan recorded a 16% rise in the value of underlying education projects starting on site during 2008 and a further 10% increase over 2009.

However, government funding is set to be reduced significantly over the next four years following the Comprehensive Spending Review. Many of the projects covered by the BSF programme which had not reached financial close have now been cancelled. While there still will be a flow of new build and re-fit projects, it will be a severely diminished one.

Indeed, despite a strong start to 2010, the poor performance experienced over the latter half of the year and into this year was an indicator of the tough times to come. With the level of government funding now slashed the outlook for education is bleak. There was a 2% decline in the underlying value of starts last year, with a further 25% drop expected in 2012.