UK construction starts fall 21% annually

The value of UK construction projects starting on site fell 21% year on year during the three months to the end of October 2026, as weakening residential and non-residential workloads outweighed an increase in civil engineering activity.

The latest Glenigan Construction Index records a 9% reduction in the value of underlying work starting on site against the preceding three-month period. The results indicate that the flow of new projects into construction remains substantially below the corresponding period in 2025.

The index covers underlying projects valued at £100m or less, with figures seasonally adjusted. It measures the value of projects commencing on site rather than the number of planning permissions granted, contracts awarded, or developments under consideration.

The distinction is important because schemes can remain within a development pipeline for extended periods before construction begins. Planning, financing, technical design, procurement, and other requirements must be sufficiently advanced before a project can progress to physical delivery.

Residential construction remained particularly weak. The value of housing projects starting on site fell 4% against the preceding three months and was 29% lower than a year earlier, continuing the contraction affecting both private and social housing development.

Private housing starts declined 1% against the preceding period and were 28% lower year on year. Although the more recent reduction was comparatively modest, the annual figure indicates that the value of new private housing work entering construction remains substantially below its previous level.

Social housing experienced a sharper deterioration, with starts falling 12% against the preceding three months and 31% compared with the equivalent period in 2025. The decline indicates continued difficulty in translating development plans and funding arrangements into construction activity.

Residential projects require sufficient financial viability before contractors can begin the principal building works. Developers must establish whether the expected value or funding of completed homes can support land expenditure, construction costs, infrastructure, professional services, and financing requirements.

Where these assumptions no longer produce an acceptable financial return, a scheme may be delayed while costs, design, tenure arrangements, or funding options are reviewed. Such delays can reduce construction starts even where planning permission remains valid.

Non-residential construction also weakened, with the value of starts falling 21% against the preceding three months and 22% year on year. Industrial, hotel, and leisure developments recorded particularly substantial declines, while office and retail construction showed greater resilience in their annual comparisons.

Industrial construction starts fell 29% against the preceding period and were 44% below a year earlier. The decline reflects a lower value of industrial projects commencing construction within the index period, although the figures do not establish whether individual developments have been cancelled or rescheduled.

Hotel and leisure starts declined 45% against the preceding three months, leaving activity 37% below the equivalent 2025 level. These sectors contributed to the overall weakness across non-residential construction, where the timing of individual projects can materially affect the value of work starting on site.

Office construction performed comparatively better. Starts fell 8% against the preceding period but remained approximately 20% higher than a year earlier, indicating that the value of projects entering construction exceeded the corresponding 2025 level despite the more recent slowdown.

Retail development followed a similar pattern, declining 3% against the preceding three months while standing 17% higher year on year. These results contrast with the considerably weaker performance of industrial and hotel developments.

Public sector construction recorded mixed results. Education starts declined 7% against the preceding period and were 4% below a year earlier, while health construction fell 38% and 34% respectively.

Community and amenity projects declined 13% against the preceding three months and were 39% lower year on year. The reductions reflect fewer projects or a lower value of projects commencing within those categories, rather than a direct measure of expenditure on existing construction sites.

Civil engineering provided the principal area of growth. The value of starts increased 21% against the preceding period and stood 19% above the equivalent period in 2025, supported by significant activity in utilities and energy-related construction.

Utilities starts rose 55% against the preceding three months and 70% year on year. Glenigan identified energy and data centre-related investment among the contributors, with the £45m Brecks Solar Farm development in Nottinghamshire providing a specific example of a project entering construction.

The contribution of individual projects can be substantial within an index covering developments valued at £100m or less. A relatively small number of sizeable schemes entering construction during one period can influence results, particularly within specialist infrastructure categories.

The wider infrastructure category did not experience the same improvement as utilities. Starts fell 5% against the preceding period and were 14% below the previous year's level, indicating that civil engineering growth was concentrated in particular areas rather than extending across the full sector.

Energy infrastructure projects can progress under different investment and funding conditions from residential and commercial developments. Their construction programmes may be driven by network capacity requirements, generation investment, or the expansion of industrial and digital infrastructure rather than demand for conventional property.

These projects nevertheless require substantial preparation before construction can begin. Land access, environmental requirements, grid connections, engineering design, and procurement arrangements can influence when work reaches the site and enters the construction-start figures.

Regional performance varied considerably. Wales recorded a 7% increase against the preceding three months and stood 58% above the equivalent 2025 period, making it the strongest region in the latest annual comparison.

The North West recorded a 4% increase against the preceding period and was broadly unchanged year on year. The East Midlands improved 5% over the latest period but remained 8% below its previous annual level.

London's starts fell 9% against the preceding three months and were 8% lower year on year. Scotland recorded reductions of 10% and 27% respectively, while the East of England declined 3% over the period and 37% annually.

The West Midlands experienced a particularly sharp reduction, with starts falling 38% against the preceding period and 39% year on year. The North East declined 15% over the latest three months and was 58% below the equivalent period in 2025.

Northern Ireland also recorded substantial reductions, with starts falling 32% against the preceding period and 39% annually. The regional variations reflect differences in the timing, composition, and value of projects commencing construction across the country.

The overall Glenigan Index stood at 132.3 in October. Its residential component recorded 157.1, non-residential construction stood at 105.1, and civil engineering reached 173.3, reflecting the relative strength of infrastructure work compared with other parts of the market.

The index should be distinguished from construction output statistics, which measure work undertaken over a reporting period. A development entering construction may generate expenditure and workloads over several subsequent months, meaning changes in project starts can precede changes in recorded output.

It also differs from purchasing managers' surveys, which measure changes in business activity reported by participating construction companies. Glenigan's project-based assessment identifies the value of new work commencing and therefore provides a separate indication of the construction pipeline.

The latest results leave residential and non-residential development substantially below their previous annual levels, with utilities providing the strongest support for new civil engineering work. The next reporting period will show whether additional projects in other sectors begin construction or whether the imbalance between utilities and the wider building market persists.