Figures released by construction intelligence providers Glenigan forecast a 4% increase in project starts for 2014, as private sector investment leads a sustained recovery in industry activity.

The Construction Prospects for 2014 report, prepared by Glenigan's economics team, indicates that the value of projects receiving detailed planning approval has improved strongly in 2013 and a firm development pipeline of future projects is now in place.

Underlying project starts in the UK are expected to have risen by 2.5% this year due to increases in the value of civil engineering projects and an uplift in private housing. Work volumes will continue to pick up across the industry as the increase in project starts feeds into output figures.

Commenting on the construction outlook for next year, Allan Wilén, Economics Director at Glenigan, said: "Looking ahead to 2014, we anticipate an acceleration in construction growth, with project starts expected to increase by 4%. The private sector will be the key driver of demand in 2014 and Glenigan expects strong growth in the value of industrial, office, retail and hotel & leisure projects being brought to site."

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Allan added: "New project starts in these sectors contracted during the first half 2013 as economic confidence faltered; however data for the second half of the year shows a rapid growth in starts that is expected to continue through 2014."

Growth will be felt across the main sectors of the industry, with starts of civil engineering and non-residential work driving expansion.

However, overall residential starts are forecast to slip back as continued increases of private housing starts are offset by a sharp fall in social housing due to government funding cuts.

Low levels of government spending will be less of a drag on non-residential work, while falling starts of health projects will be offset by a large increase in funding for school renovation and new build projects through the Priority School Building Programme.

Rises in office construction will be focused on major metropolitan areas, but retail and leisure project growth is likely to be more widely spread as consumer spending picks up across the country.

The focus of central government capital expenditure on transport will broaden from rail towards road projects and this will lead to a more even spread of infrastructure work across England.

The value of projects starting in the North East, North West and Northern Ireland has increased this year; however it is expected to decrease into 2014 as lower consumer purchasing power in the regions discourages investment in retail and leisure property.

(CD/JP)