IN Brief:
- Project starts fell 49% over the quarter and 28% year on year.
- Main contract awards rose 45% quarterly and 120% annually, while detailed planning approvals weakened.
- Health and community pipelines strengthened, but residential, civils and industrial starts remained under pressure.
Glenigan has recorded a sharp deterioration in UK construction starts during the three months to the end of August, even as the value of main contract awards strengthened markedly. Its September Construction Review shows project starts down 49% against the preceding three months and 28% lower than a year earlier, while main contract awards rose 45% quarter on quarter and 120% year on year.
Detailed planning approvals moved in the opposite direction to awards, falling 7% against the previous three months and 13% compared with the same period of 2025. Contractors are therefore entering the autumn with substantially more work moving through procurement than onto live sites, extending the separation between future workload and current construction activity.
The pattern follows the August Construction Review, when awards were already rising faster than starts. September widens that gap: project commencements have weakened sharply, while a larger volume of major commitments is accumulating further forward in the pipeline.
Residential construction remains one of the clearest weak points. Project starts were 33% lower year on year, while main contract awards increased 77% over the same period and detailed planning approvals rose 7%. Private housing still accounted for the largest share of residential starts at £3.155bn, but that value was 34% below the previous year. Private apartments fell 21% to £1.525bn, while social housing starts dropped 33% to £1.161bn.
Commercial sectors produced an equally uneven picture. Office starts fell 24% year on year and contract awards were also 24% lower, but detailed planning approvals climbed 147% as several large schemes moved through the development pipeline. Retail starts edged 4% higher and contract awards rose 236%, although approvals declined 11%. Hotel and leisure starts fell 2% year on year, while awards increased 761% after a run of major projects and approvals rose 24%.
Public sector work produced some of the strongest forward indicators. Health starts increased 13% year on year and planning approvals rose 71%, while main contract awards increased 1,852%. Hospitals represented 43% of starts in the sector, with dental, health and veterinary centres recording the fastest percentage growth. Education starts were 33% lower, but contract awards rose 84%, again leaving procurement activity ahead of physical delivery.
Community and amenity work strengthened at construction stage, with starts up 25% and approvals 123% higher. Military projects accounted for the largest share of activity at £200m, ahead of prisons at £178m and blue-light schemes at £113m. Public investment is consequently supporting sections of the market at a point when private development remains more fragmented.
Civil engineering weakened sharply during the latest period. Starts were 28% lower than a year earlier, contract awards fell 35% and planning approvals dropped 67%. Against the preceding quarter, starts were down 80%. Roads remained the largest source of activity, accounting for 33% of starts and rising 22% year on year, but the wider civils pipeline lost momentum.
Industrial construction also remained subdued. Starts fell 49% year on year and contract awards were 9% lower, although planning approvals increased 16%. Manufacturing projects represented 56% of industrial starts at £744m but were 57% lower than a year earlier. Warehousing and logistics fell 35% to £528m, while other industrial work declined 7% to £49m.
Allan Wilen, economics director at Glenigan, said: “UK construction activity remained subdued over the last few months with fewer projects starting, reflecting a market still weighing up its options.” He pointed to the rise in major project commitments and infrastructure awards while noting that financing conditions and investor confidence continue to influence when schemes proceed.
The September figures leave the industry with two markedly different measures of workload. Awards suggest more committed work is entering the pipeline, while starts show little evidence yet of a broad recovery in site activity. Contract award alone does not guarantee immediate mobilisation, particularly where funding, design development, planning conditions or client approvals remain outstanding.
Conversion will therefore be the key measure through the final quarter of 2026 and into 2027. If the increase in awarded work begins moving through site gates, current activity should start to close the gap with the pipeline. If mobilisation remains slow, contractors will instead carry a larger volume of secured or prospective work without a corresponding rise in near-term construction output.
