The latest data from the Office for National Statistics shows that total construction output is estimated to have fallen by 0.5% in the three months to July 2026
The fall in output follows four consecutive increases in the three-monthly series, with strong growth in the three months to April and May of 1.3% and 1.5%, respectively.
Broken down month by month, monthly construction output is estimated to have grown by 0.1% in July 2026, following a 0.1% decrease in June 2026 and a 0.8% decrease in May 2026.
Commenting on the 0.1% increase in monthly construction output, Matthew Jones, founder of financial software firm OpenECX, said: “The increase is encouraging, but one positive set of figures shouldn’t disguise the pressures firms are still facing. Geopolitical uncertainty and disruption from the Iran war continue to put pressure on already tight margins, so the question is whether this momentum can be sustained.”
Repair and maintenance responsible for July surge, but outlook remains bleak
The increase in monthly construction output in July 2026 came solely from repair and maintenance, which grew by 0.8%, while new work fell by 0.4%.
Private housing repair and maintenance drove the monthly increase in repair and maintenance, rising 1.7%, while private housing new work fell 4.9%, the largest contributor to the decrease in total new work.
“While the headline figure may show an increase in output in July, the fact that this came solely from repair and maintenance work reflects the challenging conditions impacting the industry,” stated Clive Docwra, managing director of property and construction consultancy McBains.
“Particularly concerning is private housing new work falling by close to 5% in July, at a time when the government is talking up the housebuilding sector. The industry will also worry that medium-term growth is slowing, with output falling by 0.5% over the three months to July, after four consecutive quarterly increases.”
Six of nine main sectors recorded a decrease in construction output
Over the whole three-month period, both new work and repair and maintenance fell by 0.4% and 0.7%, respectively.
At the sector level, six of the nine sectors fell in the three months to July 2026, with the main negative contributor being private housing repair and maintenance, which fell by 1.7%.
Neil Leitch, managing director of development finance, Hampshire Trust Bank, commented: “These figures are another reminder that housing ambition and housing delivery are two very different things. If we want a genuine reset in housebuilding, we must address the conditions that determine whether developers are prepared to commit capital and start building in the first place.”
Times will remain challenging for the construction industry
Matthew Cook, managing partner, Goodman Jones, explained: “The construction sector continues to face challenging trading conditions and it is no surprise that output levels remain subdued. More concerning is the data on the growing number of businesses showing signs of financial difficulties.
“When contract costs rise, margins are tight, borrowing costs remain high, and projects take longer to complete, even relatively small issues can quickly become significant problems.”
He concluded: “Construction companies that invest time in producing high-quality financial information and regularly reviewing contract performance will be far better placed to identify problems early, protect cash flow and navigate what remains a challenging market.”
The post UK construction output falls 0.5% as pressure mounts appeared first on Planning, Building & Construction Today.
