Construction output starts 2026 on a slower footing

Latest News Mon, Mar 16, 2026 6:45 AM

The Office for National Statistics has published estimates of Construction Output for January 2026, which shows total construction output is estimated to have fallen by 2.0% in the three months to January 2026; this is the fourth consecutive fall in the three-monthly series.

Over the three-month period, both new work, and repair and maintenance, fell by 3.2% and 0.4%, respectively.

At the sector level, seven out of the nine sectors fell in the three months to January 2026; the main negative contributor to the decrease was private new housing, which fell by 6.3%.

Monthly construction output is estimated to have grown by 0.2% in January 2026; this follows three consecutive falls in the monthly series.

The increase in monthly output in January 2026 came solely from an increase in repair and maintenance, which grew by 3.3% as new work fell by 2.0%.

BCIS chief economist, Dr David Crosthwaite said: “The sharp fall in new work softened construction output at the start of the year. On the month, the only area of new work to see growth between December and January was in the private commercial sector. Housing output was largely down across the board with the exception of private repair and maintenance work.

“The results likely reflect a combination of impacts, including wet weather conditions, seasonal trends and the lingering effect of deferred investment decisions linked to Budget uncertainty. The concern for the sector is that these disappointing results come before the effects of the Middle East crisis have been factored in. The likelihood is that any supply chain disruption and broader uncertainty will feed through into stalled client decision-making and cost inflation.”

The 2.0% fall in construction output in the three months to January 2026 should set alarm bells ringing for an industry already under strain, says the Federation of Master Builders (FMB).

Brian Berry, Chief Executive of the FMB, said: “Alarm bells should be ringing loudly after another fall in overall construction output, marking the fourth consecutive drop in the three‑month figures. The steep decline in private new housing is especially worrying, as this is where we need momentum if we're to even get close to the Government's target of 1.5 million new homes. Taken alongside a stagnating wider economy, with 0% growth this month, these figures suggest that confidence is draining away from the sector at a critical moment.

“It is telling that the only area showing growth at the start of the year was repair, maintenance and improvement work, which is largely carried out by micro companies, although this output has dropped overall in the last 3 months. This shows that the nation's small builders are propping up construction output as a whole, but they cannot shoulder the burden alone.

“If the Government wants to get construction back on its feet, it must push forward with its changes to the National Planning Policy Framework (NPPF) quickly and ensure local authority planning teams are adequately staffed to ensure other areas like housing can push on with delivery."

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