Outlook for the regional and national construction industries© Centre for Economics and Business Research Ltd, 201135-40% -30% -20% -10% 0% 10% 20% 30% 40% 50% North East North West Yorkshire & The Humber East Midlands West Midlands East of England London South East South West Wales Scotland Underlying starts Construction output All starts Construction outlook for Great Britain by English region and Wales and Scotland, % change 2010-2013 Source: Glenigan

Outlook for the regional and national construction industries© Centre for Economics 36and Business Research Ltd, 2011. The diagram on the previous page shows Glenigan'sforecasts for the future of the industry in the variousEnglish regions and in Scotland and Wales. Itillustrates modelled projections of project startsbased on Glenigan's analysis of: (i) planned projectsin its database and (ii) historic project starts. Theoutput forecast follows on from this, again looking atpast relationships and likely future trends.. "Underlying starts" exclude projects below £250,000- these are usually routine maintenance and smallimprovement works. Repair and maintenanceprojects usually constitute about a third ofconstruction output and Government new ordersdata indicates that around 20% of new workcontracts are for projects below the £250,000threshold.. "All starts" also excludes projects below £250,000but includes large projects in excess of £100 million.The latter can have a significant impact on regionaltotals and can mask the underlying trend in marketconditions. The majority of these schemes are inLondon.. Construction output relates only to the value of workexpected to be undertaken in the relevant year,whereas the starts data relate to the total overallvalue of the project, regardless of its timing.. The value of project starts and construction outputare forecast to remain weak over the next two yearsas falling public sector investment acts as a drag onindustry workload, offsetting a gradual recovery inprivate sector work.. The declines will be centred on those regions andcountries with a greater dependence on publicprojects, such as the north of England, Wales &Scotland.. These nations/regions also have a greaterpreponderance towards public sector employmentand constraints there are also likely to impactconsumer confidence, which will in turn act to curbthe recovery in private housing.. Modest rises in construction output are expected inLondon and the South. The capital is expected tobenefit from commercial projects and continuedsupport for major infrastructure schemes, such asCrossrail. Better consumer confidence meansprivate housing should also fare better in theseareas.