The latest Glenigan Index of construction starts under £100m shows the market remains subdued, with residential activity under pressure.
The value of work starting on-site during the three months to January declined 9% and remained 16% below 2025 levels.
Whilst commercial office and industrial project starts remain resilient, the strong performance in these verticals is not nearly enough to offset the serious shortfalls in others.
Residential project starts, or rather the lack of them, remains a thorn in the industry side. Whilst there’s plenty of ‘jam tomorrow’ around policy reform, consistently promised by the Government, investors will be waiting for stronger demand from house buyers before making the essential firm commitments to kickstart private housebuilding.
Other verticals gradually began to stabilise, with civils perhaps the most encouraging, bolstered by a surge in utilities related activity as investment by the water and energy industry gathers momentum. Education also stood out as another shining light amongst the gloom, suggesting the public sector funding is finally being released not only to accelerate the RAAC Remediation programme but also refurbish a large proportion of crumbling school stock.
However, for Glenigan’s Economics Director, these results pale in significance when measured against the inability of the residential sector to reestablish its momentum. As he explains:
“Housing is often seen as the bellwether for industry confidence and prospects. This is all too evident in our latest Index, with a sharp drop in private residential projects dragging down overall construction starts. Whilst a stabilisation in civil engineering work and a rise in non-residential activity are welcome, a strengthening housing market and increase in private housebuilding will be key to lifting overall project starts during 2026.”
Sector Analysis – Residential
Housebuilding remained in the doldrums of poor performance, continuing along the downward slope it’s been travelling on since Summer 2025. Overall starts declined by almost a quarter (-24%) during the Index period, falling nearly a third (-32%) compared to 2025 figures.
Drilling deeper, private housing accounted for the lion’s share of this misfortune, with activity falling by a whopping 38% compared to last year and by 30% against the preceding three months.
Social housing, which had recently experienced a modest upturn, once more found itself lagging 9% behind the previous three months performance and 2025 levels.
Sector Analysis – Non-Residential
Continuing to go from strength to strength, once again, office starts found themselves on an upward trajectory, rising to 7% against the preceding three months to achieve an impressive 21% growth on last year’s figures.
The commencement of various schemes supported continued activity increase in this vertical, including the £32 million The Interchange at Brabazon on the former Filton Airfield in Bristol
Similarly, industrial performance, which enjoyed a period in clover at the back end of 2025, remained robust, registering a 2% uptick in starts against the preceding three months, standing 10% higher than last year’s results. The commencement of the £57.5 million Axis Works Plot 1 storage and distribution unit development in Bristol was the primary driver for these strong figures, alongside a handful of other, smaller developments.
As a welcome surprise, education was up during both the Index period (+5%) and the previous year (+34%). This boost can be largely attributed to the commencement of the £60 million Stirling Building development at the University of Cambridge.
Elsewhere, it was a mixed bag. Whilst retail increased by 14% against the preceding three months, this rise was not enough to mitigate a 13% decrease on 2025 levels. Likewise, hotel & leisure was up by almost a quarter (+24%) compared to the previous three months, but down by 12% against the preceding year.
Conversely, whilst community and amenity starts declined by 3% during the Index period, they stood 4% higher than 2025 levels.
Civils remained flat against the preceding three months but fell by 8% against the previous year. However, taking a closer look reveals a tale of two sub-verticals. Infrastructure had a particularly torrid three months to January, posting a 40% decline as well as seeing project starts values slashed almost in half (-48%) compared to 2025 results. Compared to utilities, it’s night and day, which rocketed by 55% against the preceding three months to soar 68% over the previous year.
Regional outlook
The Capital proved the standout performer, regionally, rising to 41% against the preceding three months, finishing a third (+33%) up against the previous year. Northern Ireland also demonstrated strength, with starts on site rising by 27% during the Index period and by 11% on 2025 results.
Performance was inconsistent in the East Midlands and North West, with both regions rising against the preceding three months, but remaining below the previous year.
Elsewhere, results were disappointing, with the West Midlands experiencing a particularly poor period, falling by a fifth (-20%) during the Index period and by a similar figure (-23%) against 2025 levels. The South East also had rather a tough time, declining 22% against the preceding three months to stand 15% down compared to the previous year.
