North West project starts dip
The volume of construction starts in the North West fell by 2.2% in the first half of 2014 compared to the same period last year, though it remained the most active region in the UK outside of London and the South East.
According to the inaugural Construction Index by property consultant JLL and data provider Glenigan, between January and June 2014 a total of £2.4bn of commercial construction projects got underway in the North West. This compared to £1.74bn in Yorkshire and £2.03bn in the West Midlands.
London saw the highest growth of any region, jumping 27.2% to £5.46bn. The South East saw a dip of 11.6% to £2.58bn.
New activity fell by 6.3% on average for the regions outside of London.
Hotel construction was cited as being one of the biggest drivers for activity levels in Manchester, with the city experiencing one of the highest ratios of pipeline development to room supply.
In the office sector, prime vacancy rates in Manchester stand at less than 2%, which JLL said make development inevitable over the next 12 months.
The index shows that activity levels in the North West are still below pre-recession levels.
Nick Currie, director of building and construction at JLL in Manchester, said: "I think it's fair to say that we're overdue a burst of activity in the offices sector, particularly in Manchester where Grade A space is severely limited.
"Alongside hotels, the retail sector is among the most active in the North West at the moment. Out-of-town retail and retail warehousing are busy areas in particular, with both new build and refit schemes continuing to come forward.
"Conditions for contractors are tough at the moment, but not because of lack of work. As the market has lifted, materials prices have risen to record highs while a long and deep industry recession has depleted the supply of skilled labour."