The value of construction projects starting on site during the three months to February 2010 was 15% lower than the same period a year ago according to the latest Glenigan Index.

The fall is the result of continued weakness of non-residential project starts and a drop in civil engineering projects.

"The rise in private housing projects points to improving private sector confidence which is expected to lift industry prospects during 2010 countering the impact of declining government funded work," said Allan Wilén, Economics Director, Glenigan.

The Glenigan Residential Index for February was 13% higher than a year ago due to an increase in private and social housing project starts.

"Private housing projects picked up as housebuilders pressed on with projects disrupted by poor weather during December and January.

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"Housebuilders are keen to capitalise on rising house prices and property transactions and the further improvement in market conditions anticipated for 2010," commented Mr Wilén.

The Non-Residential Index for February was 24% lower than February 2009 because private and public funded project starts were weak.

Mr Wilén explained: "Commercial and industrial project starts remain weak due to the sharp fall in rental and capital values over the past two years.

"Increased investor interest in these markets has not yet fed through to developer activity. Glenigan forecast that office, industrial and retail project starts will increase in the second half of 2010."

Mr Wilén added: "The rise in government funded work since April 2009 partially offset weak private sector investment.

"However, more recently the flow of health and community & amenity projects has slowed and education projects fell back sharply during the three months to February.

"The Civil Engineering Index for February was 32% lower than February 2009 due to fewer road and rail projects and a surge in project starts in February 2009 which exacerbates the fall in the annual comparison.

New renewable energy and transport infrastructure projects are forecast to boost in the sector.

(BMcC/GK)