In the three months to the end of July 2026, main contract awards rose by 17%, a full 169% increase from the same period last year
The construction industry pipeline has also benefited from a jump of 10% in detailed planning approvals in the three months to July.
While this is good news, planning approvals are still down 3% year-on-year, and project starts on-site fell 7% in the three-month period, roughly in line with last year.
Latest Glenigan Construction Review brings a small dose of hope
The review says the boost in contract awards signals that market confidence is starting to return, largely due to a spike in major project activity, such as the New Hospital Programme.
As for the rise in detailed planning approvals, this is hailed as a further sign of a very modest recovery and that the pipeline is slowly beginning to fill again, and mild recovery begins as noted in the previous Glenigan review.
Hotel & Leisure is another sector credited for this small bit of good news, as well as activity in public sector and civils, but contractors and subcontractors must remain cautious, as project starts highlight that activity itself has not yet seen the benefit of this boost due to lack of investor confidence and uncertainty in public spending.
The review also covers:
- Residential: Project starts dropped by 39% year-on-year despite main contract awards rising 60%, and detailed planning approvals easing 22%, as private housing dropped a full 52%. As this makes up 40% of the sector, this was a devastating blow. The social housing sector only dropped by 27%, stopping the fall from being too critical.
- Private non-residential: Office starts on-site dropped by only 3%, but approvals raised by 54%, with the £50-100m band rising an encouraging 80% to £361m. Hotel & Leisure contract awards jumped by a whopping 787% in the three month period with approvals following by 56%.
- Public sector: Health starts on-site grew by 32%, with awards climbing 634% and approvals 65%, thanks to the New Hospital Programme and NHS capital commitments, and hospitals made up over half of the starts.
- Civils & infrastructure: Project starts grew 171% year-on-year and main contract awards grew 85%, but approvals regressed by 37% year-on-year. The review states that this is likely not anything to worry about, and is more like a pause than a full drop.
“Prospects appear to be turning a corner”
Allan Wilen, Glenigan’s economics director, says, “There are plenty of reasons for readers to be cheerful when going through the August Review, especially following such a tumultuous and unpredictable six-months. Whilst a degree of uncertainty persists, labour and material costs are stabilising. Industry prospects appear to be turning a corner, but, before we get too excited, these green shoots are fragile and, as we’ve seen before, could wither away on the merest market change.
“The construction supply chain should stay mindful that the recovery will be shaped by wider economic conditions, investor confidence and public sector spending priorities. Remember, in spite of the excellent Main Contract Awards and Planning Approval figures, conversions into actual starts remains the litmus test of the sector’s performance over the back end of the year.”
You can request the full Glenigan review here.
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