Construction Industry Forecast 2027-2028

Spot growth opportunities and emerging risks in UK construction with Glenigan’s 2027–2028 industry forecast.

UK construction project starts are set to fall by 13% in 2026, before rebounding by 11% in 2027 and a further 7% in 2028, according to Glenigan’s Winter 2026 Construction Industry Forecast.

The outlook is weaker than in our Summer forecast, which predicted a 1% dip this year.

The prolonged conflict in the Middle East has pushed up energy prices, inflation and borrowing costs, weighing heavily on investment decisions across the industry. However, the medium-term picture remains positive, with public sector programmes, infrastructure investment and a gradual return of private sector confidence expected to drive a recovery from 2027.

2027-2028 Outlook:

• Economic Recovery: Construction starts forecast to recover by 11% in 2027 and 7% in 2028.
• Private Sector: Investment remains focused on lower-risk, higher-margin projects amid ongoing market uncertainty.
• Public Investment: Education and health construction accelerates as Spending Review funding reaches site.

• Improved consumer spending boosts private housing, retail and hotel & leisure construction.
• Recovery in office construction drives growth in new build, refurbishment and remodelling projects.
• Rising demand for data centres and modern commercial space supports market expansion.
• Stronger public sector investment accelerates education and health construction activity.
• Infrastructure and utilities growth is driven by net-zero and regulatory investment programmes.

Glenigan’s Construction Forecast draws on our comprehensive database of UK construction projects, combined with proprietary modelling and market analysis to provide a forward-looking view of industry activity.

Forecasts are informed by project-level data across the construction pipeline, from early planning through to start on site, supported by macroeconomic indicators, sector drivers, and historic trends. Activity is analysed by sector, with regional breakdowns and a distinction between underlying projects, defined as those below £100 million, and major projects valued at £100 million and above. As with all forward-looking analysis, projections are indicative of trends and subject to revision.

Providing businesses with clear and easy-to-understand metrics and analysis on key industry KPIs, our reports include a biannual industry forecast, monthly sector performance analysis, construction company league tables, and sector-specific reports commissioned by our partners.