Last year proved a disappointing one for the construction industry, as the value of new projects dropped by a fifth (20%), data from insights firm Glenigan has found.<\/p>\n
There was also a 11% decline in main contract awards year-on-year, and an 8% annual fall in planning approvals.<\/p>\n
Glenigan blamed the slowdown on domestic socioeconomic uncertainty and international turmoil.<\/p>\n
Allan Wilen, economics director at Glenigan, said: \u201cOnce again, it feels like the industry has been stuck in a vicious cycle where any established momentum, as we saw in the residential market in the spring, suddenly vanishes sometimes due to the tiniest twitch upon a thread.<\/p>\n
\u201cIssues that under normal circumstances would be unremarkable, can have an immediate impact on confidence and activity, showing how fragile and sensitive the UK and global economy remain.\u201d<\/p>\n
Domestic troubles included policy flip-flopping between the Spring Spending Review and the Autumn Budget Statement, as the government flirted with abolishing stamp duty and replacing it with an annual tax.<\/p>\n
In terms of international turmoil, the volatility of US President Donald Trump\u2019s policies, as well as Israel\u2019s bombing of Gaza, has added more uncertainty to the global stage.<\/p>\n
These conditions have led to interest rates being high, squeezing developers, contractors and subcontractors.<\/p>\n
Wilen added:\u00a0\u201cDespite these poor results, we\u2019re starting to see stability return, particularly a surge in non-residential work, noted in our most recent index. Whilst it\u2019s going to take a little time, the Chancellor\u2019s Autumn Statement gave a far clearer funding commitment which will hopefully get shovels in the ground, plans approved and contracts awarded on a wide range of capital projects.<\/p>\n
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\u201cThis could further be the key to unlocking both private investors and in turn, consumer confidence; we\u2019re already seeing the key starting to turn with a recent upsurge in office and industrial activity. It highlights that, whilst UK construction is certainly down at the start of 2026, it\u2019s by no means out.\u201d<\/p>\n
There were some positives last year, as the office and industrial sectors had a very strong end to the year, with project starts rising by 32% and 31% respectively.<\/p>\n
A range of manufacturing, warehouse and logistics projects accounted for the bulk of industrial starts, with Yorkshire & The Humber (+39%), South East (+30%) and Wales (+1616%) recording positive performance against the previous year.<\/p>\n
Despite a weaker pipeline with both planning approvals (-37%) and main contract awards (-2%) down from last year, the 2026 outlook appears bright with a 12% forecast growth.<\/p>\n
This has likely been prompted by higher consumer spending boosting demand and the commencement of the landmark \u00a31.4bn Cable Factory at Hunterston in Scotland.<\/p>\n
For offices, growth was predominantly driven by an increase in new build and refurbishment projects, whilst an increasing public dependence on data and AI has also increased demand for data centres (which sit in the category).<\/p>\n
Similar to industrial, next year\u2019s forecast is bright, with a 13% performance increase expected, prompted by an insatiable appetite for digital technology encouraging more data centre construction as well as the government\u2019s Tech Prosperity Deal, which promises a \u00a330bn investment to create an AI \u2018Growth Zone\u2019 in the North East.<\/p>\n
Housing saw falling construction activity, though levels are expected to recover by 6% in 2026, due to the recent interest rates cut, further buoyed by the Social and Affordable Homes Programme.<\/p>\n
Retail and health & education also saw construction activity drop last year.<\/p>\n","protected":false},"excerpt":{"rendered":"
Last year proved a disappointing one for the construction industry, as the value of new projects dropped by a fifth (20%), data from insights firm Glenigan has found. There was also a 11% decline in main contract awards year-on-year, and an 8% annual fall in planning approvals. Glenigan blamed the slowdown on domestic socioeconomic uncertainty […]<\/p>\n","protected":false},"author":1,"featured_media":7574,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-7573","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-home"],"yoast_head":"\n