Glenigan | A Hubexo Product (Glenigan), one of the construction industry’s leading insight and intelligence experts, has released the July 2026 edition of its Construction Review.
The July Review focuses on the three months to the end of June 2026, covering all major (>£100m) and underlying (<£100m) projects, with all underlying figures seasonally adjusted.
It’s a report providing a detailed and comprehensive analysis of year-on-year construction data, giving built environment professionals a unique insight into sector performance over the past year.
According to Glenigan’s data, the July Review paints a desperate picture of an embattled sector, buffered by socioeconomic headwinds from all sides. An equal 8% decline in project starts during the Review period and year-on-year figures show that UK construction keeps stumbling on the road to recovery, still unable to establish a sure footing.
These relatively disappointing results are thrown into starker relief with a lamentable decline in major contract awards during Q.2; also dipping 6% compared to last year. This indicates a distinct lack of investor appetite to get things moving any time soon, hampering progress, particularly in commercial sectors, which posted some the biggest declines in this type of activity.
However, it wasn’t all doom and gloom, a solid uptick in detailed planning approvals compared to the preceding three months (+13%), offers a welcome sign that, even if the project pipeline is not flooded with opportunity, a gently flowing stream is starting to reassert itself. However, before the supply chain gets too excited, there’s still considerable ground to make up, with these results falling far short of 2025 levels (-20%).
Yet the signs of recovery are emerging. Commenting on the July Review, Allan Wilen, Economics Director at Glenigan says, “The outlook remains delicately balanced. Yes, a bounce in planning approvals point to underlying demand, but weaker awards and starts highlight ongoing challenges around viability, financing and funding. A raft of different factors, including interest rate movements, construction cost inflation and government infrastructure investment will be critical in determining whether the stronger pipeline translates into sustainable growth in project activity.”
He continues, “Whilst the next two quarters are going to see little movement of the dial, we still predict, according to our 2026 - 2028 Forecast, that recovery will be seen in 2027. However, with the promise of a new Prime Minister going into the second half of 2026 we might see the situation change further, as the new administration looks to establish its own identity. The big question on everyone’s lips now will be whether they stick to the parameters of the Manifesto and spending commitments made in 2024, or decides to plot their own political course and economic direction. The industry will watch developments with keen anticipation over the coming weeks, deciding how to re-strategise to seize any opportunities that arise.”
Private matters drag down residential construction
Residential experienced a tough quarter. Project starts fell 34% year-on-year, and detailed planning approvals slipped 16%, though a 16% rise in main contract awards offered a degree of encouragement, pointing to continued commitment to larger schemes already in the pipeline.
Social sector housing carried the sector, recording strong growth and accounting for the largest share of starts. Private housing and private apartments both fell sharply, reflecting the ongoing squeeze from elevated borrowing costs and cautious buyer sentiment.
With the Bank of England base rate held at 3.75% and average two-year fixed mortgage rates still above 5%, borrowing costs remain a significant brake on private housing demand and developer viability. London dominated activity, with project starts reaching £2.5 billion, while the East of England led on planning approvals, rising 92% year-on-year. Most other regions recorded notable declines.
The road to recovery is a long one, but the direction of travel might improve due to more favourable economic conditions, expected in H.2 2026. Lower borrowing costs, rising real incomes and planning reforms are expected to ease conditions gradually, with a more meaningful private housing recovery anticipated from 2027.
The ups and downs of commercial construction
Private non-residential performance was inconsistent. Industrial starts dropped 37% year-on-year and contract awards fell 63%, yet detailed planning approvals rose 22%, signalling that developers are still pushing schemes forward. The East Midlands led starts at £215 million, while Wales and London both bucked the trend with strong growth.
UK logistics take-up reached 25.6 million sq ft in 2025, up 22% on the prior year according to CBRE, underlining the sustained occupier demand that continues to drive industrial and warehouse development. Manufacturing led activity, with logistics and distribution networks expected to provide ongoing support as ecommerce demand continues to build.
Offices told a similar story of short-term pain and longer-term promise. Starts fell 11% and contract awards dropped 56%, but detailed planning approvals more than doubled, rising 107%. London remained the dominant market at £867 million. The East of England surged on approvals, rising 36 times year-on-year to account for 41% of total value.
Retail and hotel and leisure both struggled on starts, down 9% and 47% respectively, though hotel and leisure approvals leapt 125%, suggesting developers are keeping faith with the sector. Yorkshire & the Humber led hotel and leisure starts, rising 141% to £135 million.
Public sector performance remains patchy
Public sector performance was a mixed bag. Education was the standout, with project starts edging up 2%, main contract awards rising 25% and planning approvals growing 9%. Schools dominated activity, and the government's Spending Review 2025 committed £2.4 billion per year to the Schools Rebuilding Programme, part of a £38 billion education capital investment over five years, the largest such commitment since 2010. London led at £259 million, with the East of England and Scotland also recording strong growth.
Health starts were in a relatively stable condition, down just 5%, though contract awards fell 26%. Planning approvals surged 74%, a positive signal for the pipeline. Yorkshire & the Humber led at £309 million, with Wales and Scotland both recording exceptional growth.
Community and amenity had a difficult period, with starts down 75% and contract awards falling 64%. Military and blue light projects provided the bright spots, recording strong growth. Yorkshire & the Humber led activity at £117 million, with Northern Ireland also contributing significantly.
Civils in clover
Civils was the sector's standout performer. Project starts surged 73% year-on-year and main contract awards rose 16%, driven by a significant uplift in major schemes. Roads projects led activity, with harbour and ports work also contributing. The South East dominated, accounting for £6.2 billion of starts following 201% growth, with the West Midlands and East of England also recording exceptional gains.
However, there’s one note of caution: detailed planning approvals fell 57%, pointing to a thinner pipeline further out. The North East bucked that trend, with approvals rising 36 times year-on-year to account for 44% of total value.
The longer-term outlook remains positive. The government's 10-Year Infrastructure Strategy sets out a £718 billion pipeline of investment across 734 projects to 2034, providing a substantial and long-term workload foundation for the sector. Anticipated investment in electricity networks, renewable energy infrastructure and major transport schemes is expected to sustain momentum, making civils one of the most closely watched sectors heading into 2027.
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