The West Midlands is now benefiting noticeably from the resurgence in the construction sector and experiencing the bounce-back that was initially concentrated in the South West according to the latest JLL/Glenigan construction activity index.
The region saw a nine per cent rise in new activity in the second quarter of 2015, as opposed to a -9.2 per cent drop in the first quarter of the year. Work started was up from £1.6 billion to £1.7 billion, which JLL believes is largely due to the number of new-build starts in the industrial and logisitics market which saw the strongest individual sector performance.
Outside of the South-East, £3.2 billion-worth of new industrial schemes commenced over the 12 months, a 12.8 per cent increase on the £2.8 billion recorded in the first quarter figures.
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The positive regional picture is also reflected across the North West and Scotland, with increases of 16.8 per cent and 17.6 per cent.
The East of England topped the leader board with 23 per cent.
Graham Taylor, building consultancy lead director from JLL’s Birmingham office, said: “We predicted the second quarter would see a bounce-back from the negative figures experienced towards the end of 2014 and the first quarter of this year.
“It seems the major urban conurbations outside of London - Birmingham, Greater Manchester are starting to gather pace.
“We know from our own experience that the industrial and logistics market has really heated up, with our team at the forefront of growth brokering over 1 million sq ft of space in the past nine months.
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“This is largely driven by a lack of supply in the region and an increased appetite for build to suit and speculative schemes.”
The West Midlands’ growth is against a backdrop of slower national growth, with volumes rising two per cent, down from seven per cent recorded over the first three months of the year.
This is thought to be as a result of a slightly flatter London, which was down -5.3 per cent, although the capital still accounts for a quarter of all construction activity. It’s believed growth in both construction and total output will be revised upwards as the year progresses.
A surge in post-election business and investment decision-making was noticeable and is expected to result in increased construction activity in late 2015 and throughout 2016.
Mr Taylor added: ”We expect markets to grow in line with stronger economic prospects over the coming years and certainly up to 2018 we will see strong performances in regional cities such as Birmingham.”