IN Brief:
- Glenigan forecasts UK construction activity to dip slightly in 2026 before rebounding in 2027.
- Underlying starts are expected to rise 11% in 2027 and 4% in 2028.
- Education, industrial, civil engineering, private housing, offices, data centres, and logistics are expected to support recovery.
Glenigan has forecast a stronger UK construction rebound from 2027, despite a difficult start to 2026 and continued pressure on investor and developer confidence.
The company’s UK Construction Industry Forecast 2026-2028 focuses mainly on underlying project starts valued below £100m. It predicts a 1% decline in 2026, followed by an 11% increase in 2027 and a further 4% rise in 2028, leaving starts 13% higher than 2025 levels by the end of the forecast period.
Glenigan says recovery depends on gradual improvement in the wider economy, stronger consumer confidence, increased public-sector capital spending, and renewed private-sector investment. The forecast highlights education, industrial, civil engineering, private housing, offices, data centres, logistics, retail, and hotel and leisure as areas likely to shape the next phase of activity.
The forecast follows a period in which construction has shown growth in some areas but continued weakness in new work. Recent data showed construction output rising slightly while new work fell, with repair and maintenance carrying much of the short-term momentum.
That split explains why many contractors still experience the market as difficult even where headline output is not collapsing. Existing asset work, compliance upgrades, retrofit, and maintenance can support activity, but they do not necessarily replace the volume, package structure, and supply-chain pull-through created by major new-build starts.
Glenigan expects education to be one of the stronger growth areas as the School Rebuilding Programme gathers pace and RAAC remediation continues. Public-sector non-housing work is also expected to benefit from increased government capital spending, while utilities, renewables, grid work, and water infrastructure are likely to support civil engineering workloads.
In the private sector, industrial and office work are forecast to contribute to recovery. Industrial activity is still expected to fall in 2026, but demand for logistics space and support from national planning and infrastructure policy are expected to drive growth in 2027 and 2028. Offices have performed more strongly than many other sectors, supported by demand for higher-quality, more sustainable, flexible space and by data centre activity within the category.
Retail and hotel and leisure remain more volatile. Consumer-facing sectors have been exposed to higher wages, taxes, weak confidence, travel pressure, and cost-of-living effects. Glenigan expects improvement from 2027 as conditions ease and operators bring delayed projects back into play, helped by lower business rates for retail, hospitality, and leisure.
The recovery, if it follows Glenigan’s forecast, will be selective rather than evenly spread. Contractors will need to watch which sectors are releasing projects into procurement and site starts, not only total workload. A rebound led by public capital, utilities, education, logistics, and data centres will favour different skills and supply chains from a broad private commercial recovery.
That distinction will influence labour, plant, materials, and tender strategy. Companies positioned around frameworks, education, regulated infrastructure, retrofit, and specialist industrial work may see opportunity sooner. Businesses reliant on speculative development or discretionary private investment may face a longer wait.
A delayed recovery can still stretch the supply chain quickly once projects begin moving. If developers and public clients release deferred work at the same time, capacity, pricing, subcontract availability, and lead times may tighten before confidence has fully returned. Contractors that maintain discipline through the slow phase will be better placed to respond when starts improve.
