Glenigan Index of construction starts to end of February 2026

Struggling under immense pressure

The Residential vertical continues to drag the sector down further, and whilst non-residential construction saw a modest increase in performance, there was not nearly enough momentum to reverse the overall decline. As markets remain volatile, consumer confidence is low, and private investment lukewarm, it seems unlikely that overall recovery will be achieved in the first half of the year.

Furthermore, recent events will likely have a significant impact on activity over the next few months. Escalating conflict in the Middle East threatens to disrupt supply chains. This would not only affect contractors’ ability to access essential construction materials; it would also have a painful operational impact as fuel and energy prices rise over the next quarter, putting extra pressure on already tight margins.

Subject to considerable change

That’s not all. While the Chancellor has delivered a ‘steady-as-she-goes’ Spring Budget Statement with no ‘rabbits’ pulled from the Chancellor’s hat, it may all change as the conflict disrupts global trade and growth, or if the UK is pulled further into military activity in the Gulf, potentially affecting where budgets are spent.

As the Index shows, a high degree of uncertainty is restricting collective appetites to get Britain building again until the industry has a clearer picture of the UK’s short and long-term fiscal future.

Commenting on the relatively grim outlook, Glenigan’s Economic Director, Allan Wilen, says, “Whilst Non-Residential construction has been a bright spot in recent months, buoyed by a growth in Office, Education and Community & Amenity work, its growth has been overshadowed by declines elsewhere. Once again, poor Residential activity has kept the flow of new projects to a meagre trickle, with exceptionally wet ground conditions during the three months to February delaying starts and contributing to the 31% drop against a year ago. It’s hoped that drier conditions in the spring will help kickstart activity. However, with a whole host of other adverse domestic and global socioeconomic challenges to surmount, we’ll need to see a significant reversal in current circumstances before we see a meaningful performance uptick.”

Taking a closer look at the results…

Residential construction remains stuck in the mud

It was another depressing Index period for residential construction, with the value of starts on-site slashed by 20% and falling by almost a third (-31%), compared to 2025 figures.

Private Housing declined by 22% against the preceding three months and by 36% against the previous year. Whilst housing affordability has improved over the last year, as household incomes have outpaced house price inflation and interest rates have eased, this has yet to lift new house sales. Developers remain reluctant to open up new sites until demand strengthens and are focussed on securing sales on existing sites. Furthermore, slow BSR approval of developments and wet ground conditions over the last three months have hampered project starts.

Social Housing also declined 16% against the preceding three months and by 14% against the previous year. These unimpressive numbers can largely be attributed to the long-term impact of cuts to grant funding. However, improved government support is expected to brighten sector prospects as the next Spending Review period commences from April.

Sector analysis – Non-Residential

The outlook was a little rosier across a handful of Non-Residential verticals.

Once again, Offices performed particularly well, continuing on an upward trajectory first registered in late 2025. A spurt of data centre construction, which falls within this category, is one of the main reasons for this surge. It saw starts rise by 40% during the Index period to finish 45% higher than the previous year. Particularly, the £50 million Chapelhall Data Centre Extension development helped support sector growth.

Hotel & Leisure results were strong, rising by 28% against the preceding three months to stand 17% up against the previous year, with the £71 million Kings Hall Leisure Centre Clapton development helping support overall growth in the sector.

Outcomes for Health were mixed. The vertical rose 3% against the preceding three months to stand 24% lower than the previous year. Education also experienced an inconsistent period, declining 9% against the preceding three months to stand 27% up against the previous year. Both are subjects of ongoing Government upgrade programmes, which will potentially see activity upticks over the coming months as more assets are brought within its sphere of operations.

Retail starts were equally mercurial, increasing 13% against the preceding three months to stand 15% down against the previous year. Activity within the discount grocer niche is helping keep performance levels stable despite high street builds remaining weak.

On the flipside, Community & Amenity project starts declined by 31% against the preceding three months to stand 21% up against the previous year, with the £91 million Newcastle Government Hub development, a standout project.

Following a relative period of growth, Industrial performance was especially poor, declining by 17% against the preceding three months to stand 10% below the previous year.

Civils work was equally unimpressive, with on-site declines down by 9% against the preceding three months and standing 20% down against the previous year. Drilling down into the vertical, Infrastructure work starting on-site plummeted 40% against the preceding three months and declined by 38% on the previous year. However, an uptick in Utilities avoided an overall vertical crash, having increased 33% against the preceding three months and by 11% against the previous year.

Regional Outlook

Looking at regional performance across the UK, London experienced a strong performance, rising by 29% against the preceding three months to stand 30% up against the previous year. Standout projects included the £92 million Kidbrooke Village apartment development near Greenwich.

Northern Ireland performed well too, rising 43% against the preceding three months to finish 22% up against the previous year.

The East Midlands and the North West experienced a mixed period, with both regions rising against the preceding three months but remaining below the previous year.

Elsewhere, the results were disappointing. The South West experienced a poor performance, declining 17% against the preceding three months to stand 35% down against the previous year. The West Midlands fared no better, dropping by 22% against the preceding three months and falling by 25% against the previous year.

Finally, not to be outdone, the South East also performed poorly, declining 23% against the preceding three months to stand 19% down against the previous year.