Social housing and health construction projects starting on site increased in the three months to July as an increase in refurbishment and extension work outweighed the drop in new build work which followed last year's Comprehensive Spending Review started to materialise.

Social housing project starts increased by 19%, the first increase in seven months, while health projects starts increased by 17%.

Three social housing refurbishment projects in London with a total value of £180 million accounted for a significant portion of the increase. Two of these projects were commissioned by Homes for Islington and the other is a 21,000 homes repair project for the London Borough for Tower Hamlets.

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In the health sector, the South West, North West and London all saw increases in project starts in the three months to July. Most notably the South West enjoyed a 15% increase over the period and accounted for 20% of all new project starts across the country in the sector. The largest project to start was a £70 million hospital ward block for the United Bristol Healthcare Trust scheduled to take two years. The main contractor for this project is Laing O'Rourke. The company is also main contractor for a £20 million hospital extension in Blackpool. Care home project starts also featured strongly across the UK in the three months to July.

Overall, the underlying value of construction project starts across all sectors was 8% lower than a year ago as the rate of decline slowed. "The South West, West Midlands and South East all experienced growth in project starts in the three months to July, while the North East, East Midlands and Scotland experienced the largest declines," commented James Abraham, economist, Glenigan. In other sectors, private housing saw a 24% year on year decline in project starts, education a 23% decline and civil engineering a 7% decline.

(CD)