Glenigan economics director Allan Wilen<\/a>.<\/p>\n\u201cWhile UK construction is certainly down at the start of 2026, it\u2019s by no means out,\u201d he said. \u201cWe\u2019re starting to see the conditions emerge that could support a \u2018phoenix moment\u2019 for the industry.\u201d<\/p>\n
He added: \u201cWhile 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
\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.\u201d<\/p>\n
Detailed planning approvals declined by 8 per cent and main contract awards fell by 11 per cent last year compared with 2024, Glenigan noted in its latest report.<\/p>\n
It said that activity improved slightly towards the end of 2025, although the construction sector\u2019s overall performance for the year remained well below previous levels.<\/p>\n
Wilen said that last year\u2019s downturn reflected a combination of high interest rates, weak investor confidence, ongoing cost pressures and policy uncertainty.<\/p>\n
\u201cOnce again, it feels like the industry has been stuck in a vicious cycle where any established momentum suddenly vanishes,\u201d he said. \u201cIssues that under normal circumstances would be unremarkable can have an immediate impact on confidence and activity.\u201d<\/p>\n
Despite the overall decline, Glenigan said non-residential sectors performed strongly. Office project starts increased by 32 per cent during 2025, while industrial starts rose by 31 per cent year-on-year.<\/p>\n
Industrial activity was driven largely by manufacturing, warehouse and logistics projects, with growth recorded across Yorkshire and the Humber, the South East and Wales.<\/p>\n
Office construction benefited from new-build and refurbishment schemes, alongside growing demand for data centres.<\/p>\n
Glenigan forecasts office activity will increase by 13 per cent next year, and it predicts\u00a012 per cent growth in the industrial sector during 2026.<\/p>\n
Hotel and leisure construction also recorded growth, with project starts rising by 12 per cent. Glenigan highlighted strong performance in indoor leisure and sports facilities, with further growth of 5 per cent forecast for 2026.<\/p>\n
Community and amenity projects saw a 68 per cent rise in starts during 2025, although Glenigan expects activity in the sector to fall back by 16 per cent this year.<\/p>\n
Civils recorded the steepest fall in starts, down 56 per cent year-on-year. However, Glenigan reported a 90 per cent increase in detailed planning approvals and a 1 per cent rise in main contract awards, suggesting a stronger pipeline of future work.<\/p>\n
The firm forecasts civils activity will grow by 17 per cent in 2026, supported by investment in electricity networks, renewables and water infrastructure.<\/p>\n
Housing activity declined during 2025 following tax changes, inflation and high borrowing costs. Glenigan is forecasting a 6 per cent recovery in 2026 following recent interest rate cuts and continued investment in social and affordable housing.<\/p>\n
Health and education construction also fell back, with starts down 21 per cent and 26 per cent respectively.<\/p>\n
Glenigan expects both sectors to return to growth in 2026, though.<\/p>\n","protected":false},"excerpt":{"rendered":"
UK construction activity fell sharply in 2025, but conditions are emerging that could support a \u201cphoenix moment\u201d recovery this year, industry analyst Glenigan has said. The value of projects starting on site dropped by 20 per cent year-on-year in 2025, according to its Construction Review for January. But conditions are beginning to stabilise for sub-\u00a3100m …<\/p>\n","protected":false},"author":135716,"featured_media":484345,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[78193],"tags":[],"class_list":["post-536437","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-data"],"yoast_head":"\n
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