The index shows a bleak update for the construction industry with significant decreases in many metrics
The Glenigan construction index shows that, in the three months to the end of August, the value of underlying work (under £100m) starting on-site declined by 2%.
Moreover, the same metric dropped by 20% year on year, showing a significantly weaker position than in August 2025.
Residential construction was hit the hardest
Starts on residential construction projects fell 15% in the three months to the end of August compared with the preceding three months, and fell 36% year-on-year.
Meanwhile, non-residential project starts rose 6% quarter-on-quarter and 1% year-on-year, and civils work starts rose 23% quarter-on-quarter but remain 24% lower year-on-year.
While non-residential and civils show the most positive news, the lack of recovery in the residential sector shows the industry is struggling to keep its footing in recovery and has not benefited as much as expected from the so-called ‘Burnham Bounce’.
The index itself is not all doom-and-gloom, however, as it holds that the worst of the drops are behind us, but there is still a long way to go before anything that can confidently be called ‘recovery’.
For the residential sector, particularly in the private sphere, the viability of sites is often in question, especially given weak housing sales, higher construction costs, and the building safety levy coming into effect.
Social housing may be a saviour as new and renewed commitments to housebuilding made by the new prime minister could boost confidence in social housing projects, but this may also depend on what gets announced in the upcoming Autumn Budget.
“The freefall has finally ground to a halt”
The index also offers regional insight:
- The North West surged 46% against the preceding three months and 8% above the previous year.
- Yorkshire climbed 43% quarter-on-quarter and 11% above last year.
- The East Midlands rose 27% against the preceding three months and 4% up from the previous year.
- London was relatively stable, dipping just 6% against the preceding three months but remaining 2% higher than last year.
- Wales dropped 13% quarter-on-quarter, but it stands 14% above last year’s level.
- The South West rose 7% quarter-on-quarter, but remained 35% behind last year.
- The North East dropped 19% against the preceding three months and 30% below last year’s level.
- Scotland fell 9% quarter-on-quarter and 32% year-on-year.
- Northern Ireland dropped 32% against the preceding three months and 11% below the previous year.
- The East of England dropped 28% against the preceding three months and 34% below the previous year.
- The West Midlands dropped by 18% against the preceding three months and plummeted 41% lower than last year.
- The South East dropped 29% quarter-on-quarter and 43% year-on-year.
Glenigan’s Allan Willen says: “After a rough start to the year, it’s fair to say the sector caught its breath over the summer and, whilst activity levels remain painfully low, they have stabilised. It’s a positive sign that the freefall, which began in Q.2 has finally ground to a halt; That said, we’re not exactly climbing yet.
“The real bright spot is non-residential, but a fresh cabinet, headed up by a new Prime Minister with new priorities, could easily upset the apple cart. Even the sectors doing well have caveats attached. Office fit-outs continue to hold up, although with occupancy rates remaining stubbornly low, it begs the question of whether developers will keep backing new schemes. Meanwhile, residential remains a drag on overall activity, as developers weigh up site viability against higher construction costs and the looming building safety levy.”
To request the full index, find out more here.
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