Glenigan’s August 2026 Construction Index shows UK construction activity is depressed in a tough socio-economic landscape
The index focuses on the three months to the end of July 2026, covering all underlying UK construction projects, with a total value of £100m or less.
It highlights that the UK construction sector remains firmly stuck in neutral, struggling to shift gears as a host of international and domestic socioeconomic headwinds strike it from all sides.
Whilst the fall in value of underlying projects starting on site in the previous three months (-11%) was slightly less severe than figures recorded in last month’s edition, performance remains well behind last year’s levels (-29%), which were lower than 2024 results.
What’s causing a slump in UK construction activity?
Ongoing international conflict and the political turbulence on the home front, which steadily increased over H.1 2026, are still sending shockwaves throughout the sector, with previously laid-out plans at risk or being ripped up and private investors still uneasy about releasing investment.
Could a new prime minister mean activity is on the up?
Whilst residential construction remained stuck in low spirits, there were a couple of growth areas in other verticals. Office starts were the outlier, posting positive stats during the Index period and compared to the previous year.
Moreover, civils work saw an impressive uptick quarter-on-quarter, implying that Spending Review money is starting to be released for infrastructure and utilities work.
Glenigan’s Yuliana Ivanykovych explained: “Try as it might, the sector continues to be held back by external factors beyond its control, with a changing of the guard at the top of Government being the latest in a string of extraordinary events. Key barometers such as residential construction remain depressed, with little immediate sign of the dial moving before the end of the quarter.
“With the new prime minister keen on hard hats over academic caps, we might yet see some movement here ahead of winter, so I imagine the whole industry will be keenly looking on to see what further policy announcements he makes over the next few weeks.
“However, to slightly temper this optimism, there remains a considerable degree of uncertainty across global markets. Tough economic conditions out of Andy Burnham’s control might dent those ambitions usually achievable in normal economic circumstances.”
A closer look at sector specifics
Residential
It was yet another poor period for residential construction, which has been stuck in reverse for the past 12 months.
Overall performance was down by a quarter (-25%) compared to the preceding three months, plummeting 46% against 2025 levels.
Non-residential
According to Glenigan data, offices had a strong spell of growth. Rising 25% against the preceding three months, it was the only vertical to outstrip 2025 activity, soaring by 34% over last year’s results.
Industrial activity, supported by a £74 million storage and distribution project in Leicestershire, increased almost a third (+30%) quarter-on-quarter, yet remained 6% lower than a year ago.
Civils
Hinting that the small shoots of revival might be taking root in civil engineering, work starting on site in this vertical lifted by 34% compared to the previous three months.
This relative growth can be attributed to a spike in both infrastructure and utilities activity during the Index period, with project starts up by a quarter (+24%) and by half (+51%) respectively.
Projects including the £74m Culham River Crossing in Oxfordshire and the £68m flood protection scheme in Dumfries were partly responsible for this welcome uptick in a vertical that has experienced a particularly sluggish spell over H.1 2026.
Performance by region
Glenigan’s data showed that regional performance was mixed, with most struggling to gain enough traction to match 2025 results.
The West Midlands proved the standout performer, possibly spurred on by the £53 million refurbishment and alterations services let by the West Midlands Police Authority, recording a 23% rise against the preceding three months, finishing almost a quarter (-24%) below the previous year.
The East of England also recorded growth, rising 7% against the preceding three months, though remaining 22% below the previous year. The South West increased 8% quarter-on-quarter, but activity was still 45% lower than a year earlier. Yorkshire rose 13% against the preceding three months, though remained 36% below last year’s level.
London experienced a relatively resilient period. Whilst project-starts declined a modest 5% quarter-on-quarter, figures held broadly in line with last year’s level, up 1% year-on-year.
Elsewhere, it was a story of decline and fall. The South East dropped 27% against the preceding three months and was 46% below last year. Scotland fell 20% quarter-on-quarter and 31% year-on-year. Wales also weakened, declining 37% quarter-on-quarter and 28% compared with a year earlier.
Northern Ireland, which had a comparatively stable H.1 compared to other regions, recorded one of the steepest drops, tumbling 52% against the preceding three months, to finish 22% below the previous year.
The post Glenigan data shows UK construction activity remains “firmly stuck in neutral” appeared first on Planning, Building & Construction Today.
