Deloitte’s Regional Crane Surveys noted a slowdown in development activity across its four cities, with construction inflation costs, influenced by global economic factors, challenging the sector.
The crane survey series monitors construction activity in the central areas of Belfast, Birmingham, Leeds and Manchester.
Manchester continued to lead the way in new construction starts. Of the 47 new starts recorded across the four cities, 20 were in Manchester.
Whilst this marks a third year of decreased new starts, reaching the lowest point since 2014, overall activity levels remain strong and completion figures, with 27 projects delivered, represents a significant increase from the previous year.
Of the new starts, over half (11), were new residential schemes, with six in the office sector. There was one new student housing schemes, and one new hotel.
Manchester saw just under 1.1m sq. ft. of office space delivered to market in 2024, with 1.5m sq. ft. still under construction. In residential 4,448 homes completed construction, and there are 10,788 homes under construction and set to be delivered over the next four years.
Zoe Davidson, infrastructure and real estate partner at Deloitte said: “Looking at the residential sector, rental growth has continued to rise across the four cities, with Manchester leading the way in terms of the number of homes under construction. However, it’s important to note that measures such as the Building Safety Act, which, while essential, have added complexity and lengthened timelines for the delivery of residential projects.
“Our results show that no new build traditional offices started construction in 2024. This is despite a robust occupier demand for large-scale, modern, adaptable, and sustainable offices that can serve the needs of tomorrow’s workforce. With headline rents unable to keep pace with construction inflation, refurbishments are continuing to dominate construction activity in the office sector.”
Leader of Manchester City Council Bev Craig said:
“The annual crane survey shows that Manchester continues to have a strong and growing economy, and our city and region remains one of the most important engines of growth in the UK – and one of the fastest growing places in Europe.
“The survey is a useful litmus test that makes sure that our city continues to thrive, and despite a challenging economic backdrop for much of the country, we are building record numbers of homes – including more affordable housing than at any other point in the last decade – we saw more than 1m sq ft of much-needed office space delivered to market last year alone, with more than 1.5m sq ft under construction, alongside a range of commercial space opportunities.
“Manchester is leading the way in construction, but this isn’t just about buildings. This is about driving investor confidence to create a long-term supply of development. This is about creating high quality employment opportunities that help our residents to prosper. And it’s about creating a global city that is attractive, welcoming and future proof.
“The pandemic presented a range of economic challenges for the UK’s towns and cities, and building has broadly slowed. Thankfully Manchester is bucking that trend and we are continuing to attract major business, investment and residential opportunities that will help meet demand and support our city’s ongoing growth.”
