Glenigan Index of construction starts to end of December 2025

The January Construction Index reveals that overall construction performance is starting to improve following a sluggish end to Q.2 2025, and a distinctly depressed Q.3 2025. In fact, projects starting on site rose by 7% in the three months to December, indicating that the sector is starting 2026 on a surer footing than that of the preceding quarter.

Despite start activity remaining 7% lower than 2024 figures, the outlook for the coming year is far from gloomy and, with significant Government funding in areas including housebuilding, amenities, critical infrastructure, and capital projects there’s hope that this cash injection into the public realm will act as a catalyst to thaw currently frosty private investors both home and abroad.

According to the Index, this current and potential growth is being seen across a variety of different verticals and, whilst residential categories posted losses, non-residential counterparts (including civils) posted strong results during Q.4 and against the preceding year.

Commenting on the results, Glenigan’s Economics Director, Allan Wilen, says, “Contractors and subcontractors across the UK will be breathing a sigh of relief that, contrary to expectation and speculation, the sector finished up 2025 on a positive note, buoyed by significant Q.4 growth across non-residential verticals, particularly office and industrial where work has skyrocketed providing much needed momentum.”

He continues, “Looking at the year ahead, whilst it won’t be a cake walk by any means, hopefully this non-residential activity boost will provide the basis for a further strengthening, reflecting the 2026 return-to-growth predictions we made in our recent Construction Forecast. However, this only addresses half the story. In the short term, the toughest nut to crack will be the persistent private residential market stagnations. Languishing in the doldrums, it desperately awaits a return of house-purchaser confidence and faster BSR clearance of high-rise projects; something the Government will no doubt chew over intensely over the first half of the year to find a way of easing the deadlock.”

Taking a closer look at the results…

Sector Analysis – Residential

The Residential sector was a mixed bag, registering a modest 2% decline in the preceding three months, down by a fifth (-20%) against 2024 figures.

Drilling deeper, private sector activity maintained a downward trajectory, posting 15% drops during Q.4, plummeting 29% compared to the previous year.

Social housing, however, fared somewhat better, with 28% rises during the Index period to finish 16% up on last year.

Sector Analysis – Non-Residential

It was a different story in the non-residential sector, which experienced a robust period of growth, with most verticals scoring an increase during Q.4

Once again, the sun continued to shine on office construction, which rose by 11% against the preceding three months and 53% above 2024 levels. These impressive results can be largely attributed to the commencement of some sizeable projects, including the £70 million Dirac Building on the new St John’s Innovation Park development in Cambridge, and various other schemes.

Not to be outdone, Industrial project starts were similarly on the up, soaring to 41% during the Index period and by 57% against the previous year. The commencement of various schemes up and down the UK helped to support sector growth.

Once again, community and amenity projects saw an increase, with project starts on site up by 37% on 2024 figures and by 29% compared to the preceding three months.

Perhaps boosted by good vibrations from the UK Government, civils work starting on-site increased 17% during Q.4 and by 15% against the previous year. Infrastructure project starts jumped 8% and utilities 28% during the index period to finish 9% and 23% up on last year, respectively.

Elsewhere, performance was inconsistent or in decline. Whilst retail increased by 9% against the preceding three months, it stood 15% lower than the previous year’s figures. Likewise, education projects witnessed a 13% spike during the index period, but finished 8% down compared to 2024.

Health and Hotel & Leisure’s results were disappointing. The former saw performance slashed by a quarter (-25%) against the previous year, dipping 7% during Q.4. Similarly, the latter dropped 8% during the preceding three months, finishing 28% lower than 2024 figures.

Regional Outlook

The Capital was the standout performer, rising to 35% against the preceding three months to stand 33% up against the previous year.

Keeping up the pace, the North East also performed well, rising 10% against the preceding three months to stand 34% up against the previous year. It was a similar story in Yorkshire & the Humber, where project starts rose by 16% against the preceding three months to stand 1% up on the previous year.

Elsewhere, performance was either patchy or dismal. The South West experienced a mixed performance, rising to 20% against the preceding three months, yet finishing 6% down against the previous year.

The West Midlands experienced an especially poor period, declining by 19% against the preceding three months and declining to 12% against the previous year. The South East also struggled, declining 7% against the preceding three months to stand 14% down against the previous year.