Glenigan Index of construction starts to end of June 2026

According to the latest Glenigan Index data, which tracks construction starts under £100m, construction performance weakened further in Q2, dashing hopes of recovery in H.2 2026.

• The value of underlying work starting on-site during the past three months declined 15% and fell 38% below last year’s levels.
• Residential construction starts fell sharply, dropping 31% against the preceding three months and plummeting 52% compared with the previous year.
• Non-residential project-starts provided a minuscule offset, rising 3% quarter-on-quarter yet finishing 17% below a year ago.
• Civils work starting on-site declined 19% against the preceding three months and fell a miserable 45% compared to the previous year.

The July Index depicts a sector that remains stuck amid weak economic growth and geopolitical uncertainty; as one pressure releases, another bears down upon it, stifling a return to growth.

Falling further into the mire, Glenigan data reveals a spiralling decline throughout Q2; the value of starts on site fell 15% during this period, to finish languishing in a 38% slump compared to 2025 levels.

With continued instability abroad and a government in transition at home, there seems little sign of immediate relief. The knock-on effects are being acutely felt across almost every residential and non-residential vertical, where rocketing prices, finite resources and a barely dripping investment tap have caused a general sense of malaise, leading to inevitable stagnation.

This combination of uncertainty and inactivity is reflected in Glenigan’s recent Summer Forecast, which revised down its Autumn 2025 prediction of recovery this year, pushing it back to 2027, with 2026 now set to finish in the red.

Bright spots were few and far between, with some signs of life seen in office construction, which has continued to buck the overall downturn. Gains were also observed in education and healthcare, yet these were relatively modest when compared to last year’s performance, against which they barely scratched the surface.

Commenting on the July Index, Allan Wilen, Glenigan’s Economic Director, says, “In another perfect storm for the UK construction sector, a sharp decline in residential projects led the sector to decline during the second quarter. This drop reflects the impact of the Iran War on consumer confidence, with developers adjusting their development programmes in response to a slowing housing market. Non-residential construction is more stable, with an upturn in office, health and education projects offsetting weakness in other sectors. However, the impending change of Prime Minister will add to uncertainty in the near term and could disrupt the roll-out of departmental investment programmes. There’s still a mountain to climb before we reach the sunny uplands of universal recovery.”

Adopting a more sanguine tone, he adds, “Whilst this year will end in negative numbers, our forecasting predicts that we will see a return to growth next year as economic conditions improve, alongside an easing in inflationary pressures and interest rates, and as funding from the Spending Review grows. So, whilst the current picture is unclear, we should expect to see, at least, some bottoming out and revival in Q.4, heralding a larger uptick in 2027.”

Sector Analysis – Residential

Unfortunately, residential starts experienced yet another very disappointing Index period, with performance falling by almost a third (-31%) and project values slashed in half compared to 2025 levels.

Drilling down into these poor results, private housing was the principal driver of this decline; with the ongoing stagnation likely due to high (if currently held) interest rates, denting buyer appetite. Furthermore, rising labour and material costs are making developers hesitant to commit shovels to ground until the market stabilises. Starts dropped 40% compared with the preceding three months, finishing an eye-watering 63% lower than a year ago.

Less severely, social housing also contracted, with rising materials costs and a backlog of delayed projects hampering progress. This led to starts falling 11% against the preceding three months and declining 18% year-on-year.

Sector Analysis – Non-Residential

For the non-residential verticals, it was a mixed bag, performance-wise.

Once again, office construction experienced the strongest growth, soaring 51% against the preceding three months and standing 8% above last year’s level. Overall sector growth was supported by the £99 million West One development in London.

Public sector verticals also posted relatively strong results. Education delivered some impressive figures, registering increases of 17% during the Index period, leaping 7% year-on-year. Particularly, the £49.7 million Mercia and Newhall Schools development in Derbyshire helped drive growth, with more activity promised as the Schools Rebuilding Programme continues to deliver a raft of renovation and refurbishment.

Spurred on by another Government spending commitment, the New Hospitals Programme, health activity rose modestly, increasing 2% against the preceding three months. However, there is still significant ground to make up on the road to recovery, with project starts remaining 28% lower than a year ago.

Further indicating the distinct lack of consumer confidence, both at home and abroad, industrial, hotel & leisure and retail all shared poor results.

Industrial starts continued to decline, falling 15% during Q.2 to stand 29% under 2025 figures. It was also a troubled time for hotel & leisure activity, which dropped 14% against the preceding three months and by 42% year-on-year. Retail also weakened, falling 27% compared with the preceding three months and standing 9% below the previous year.

Sector Analysis – Civils

Continuing to struggle under the burden of soaring costs, labour shortages, project delays and fragile funding commitments, civil engineering work starting on-site declined 19% against the preceding three months, falling 45% compared with the previous year.

Taking a closer look, a dearth of infrastructure starts was the main culprit, falling 28% against the preceding three months to finish 51% lower than in 2025. Similarly, utilities declined 7% quarter-on-quarter and were 36% below last year’s level.

Regional Outlook

Taking the top spot, the West Midlands recorded the strongest regional performance, rising 59% against the preceding three months, although activity remained 14% below the previous year.

The South West also registered growth during the Index period, rising 10% quarter-on-quarter, but activity was still 55% lower than a year earlier. On the flip side, Northern Ireland declined 18% against the preceding three months but remained 8% above last year’s level.

Despite posting a loss, the South East proved relatively resilient, falling only 5% against the preceding three months, though remaining 42% below the previous year.

Surprisingly, London, which had posted some robust results over Q.2, experienced a weaker period, declining 15% quarter-on-quarter, down by a fifth (-22%) on last year’s level.

Elsewhere, it was a gloomy picture of decline as socioeconomic hardship continues to bite. The North East declined 16% against the preceding three months and was 37% below last year. Scotland fell 28% quarter-on-quarter and 49% year-on-year. Yorkshire fell 8% against the preceding three months and stood 45% below the previous year.