IN Brief:
- Construction output grew 0.4% in Q1 2026, according to the latest ONS figures.
- Repair and maintenance drove the quarterly increase, while new work fell over the same period.
- New orders dropped 10.5% in Q1, leaving the sector with a weaker forward pipeline despite March’s output rise.
The Office for National Statistics has recorded a modest recovery in construction output, although its latest figures also show a sharp decline in new orders during the first quarter of 2026.
Total construction output is estimated to have grown by 0.4% in Quarter 1 compared with the final quarter of 2025. Repair and maintenance accounted for the increase, rising by 3.4%, while new work fell by 1.9% over the same period.
March produced a stronger monthly reading, with output estimated to have increased by 1.5%. That followed revised growth of 0.5% in February and 0.7% in January, with financial year-end activity contributing to the rise reported by businesses.
The monthly increase came from both sides of the market. New work grew by 2.0% in March, while repair and maintenance rose by 0.8%. Across the quarter, however, the picture remained uneven, with private housing repair and maintenance identified as the main positive contributor to growth.
Forward workload indicators were weaker. Total construction new orders fell by 10.5%, equivalent to £1.238bn, in Q1 compared with Q4 2025. The decline was driven mainly by private commercial new work and infrastructure new work, two sectors that usually carry significant weight for contractor confidence, consultant workload, and supply-chain planning.
The figures leave the market with stronger current activity but thinner visibility beyond live workloads. Output measures work already completed, while orders provide a clearer view of projects moving into design, procurement, mobilisation, and site delivery. A period of rising output and falling new orders can be sustained for a limited time, but it usually points to caution in the next phase of workload.
Earlier RICS workload data showed a similarly mixed picture, with flat UK construction activity but a steadier outlook in some parts of the market. Infrastructure appeared more resilient in that survey than several other sectors, although the latest ONS order data shows how quickly confidence can shift when clients delay approvals, funding decisions, or procurement.
Cost conditions are calmer than during the most volatile inflation period, but they remain part of the commercial background. ONS reported annual construction output price growth of 0.8% in the 12 months to March 2026. That softer headline rate does not remove pressure around labour availability, preliminaries, insurance, finance, programme duration, and risk transfer.
The split between repair and maintenance and new work is especially important for business planning. Maintenance activity supports frameworks, estate programmes, compliance work, retrofit, social housing repairs, and smaller packages that can be released without the same capital exposure as major new-build schemes. New work carries different risks, often involving larger packages, planning dependency, longer procurement, and greater upfront design commitment.
With order books less predictable, contractors are likely to continue selecting work carefully. Balfour Beatty’s improved UK construction margin, supported by discipline around project selection and risk, reflected a wider shift away from chasing turnover at the expense of resilience.
The March rise will still be welcomed by contractors and suppliers with active sites and near-term workloads. It suggests that repairs, maintenance, and some new work are still moving, while year-end activity may have pulled delayed work through the system.
Longer-term confidence will depend on whether housing, infrastructure, commercial development, and retrofit programmes convert into committed orders. The market is busier than it was, but not yet secure enough to treat the recovery as settled.
