Featured sector: Social housing

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

The prospects of this sector of the construction industry have been closely linked to the priorities of the government of the day. The Labour government initially wanted to increase the stock of social housing, and then latterly wanted also to support a construction industry which was enduring the impact of the credit crunch. Between 2006 and 2010 the value of project starts just kept increasing.  By the end of 2010, the underlying value of project starts was 52% higher than in 2005.

When cutting spending and closing the hole in public finances became the priority following the formation of the coalition government, funding for social housing took one of the biggest hits of any section of government spending. Following the decimation of the Department for Communities and Local Government’s budget, we have seen falling levels of planned projects, project starts and construction output.

With the declining levels of new builds could come an increase in repair and maintenance work. As local authorities are not able to replace its ageing stock of housing, there may be more valuable contracts out there.

However, the overall trend is one of retrenchment. We expect a 6% fall in project starts this year, with a 13% decline in 2013.