Residential construction projects that started during Q1 2010 saw an increase in value of +37% compared to Q1 2009, according to Glenigan, as there was a rise in project starts for both the private and social housing sectors.

Allan Wilen, economics director for Glenigan, said: “Many projects stalled by the bad weather in January and February have now started. House-builder confidence has been boosted by rising house prices and property transactions seen since last summer. This recent improvement is encouraging and gradual strengthening in private residential construction is forecast for the coming months.

“While private sector projects are forecast to improve over the course of 2010, Government cuts will further restrict the flow of public sector schemes over the medium term. Conditions in the industrial and commercial property markets have moved off the low point reached in the first half of 2009 and project starts in these sectors are forecast to gradually improve in the second half of the year.”

Public sector project starts began to lose momentum and decline in April 2009 and the impending general election will exacerbate the fall. Whilst the value of non-residential construction project starts over the quarter were only -2% lower than the same period in 2009.

Wilen said: “An increase in retail, hotel and Olympic-related projects has helped offset the continued weakness of the private industrial and commercial sectors and a recent slowing in public sector projects.”