The UK construction industry’s prospects for recovery are becoming a casualty of war, if the latest market analysis by Glenigan is anything to go by, with the pipeline choked by international conflict.
The poor project starts figures, recorded in the three months to the end of March 2026, fell back 6%, whilst nosediving by 20% on 2025 levels, according to the company’s April Construction Review.
Glenigan’s data shows activity becoming increasingly uneven sector-wide and, whilst main contract awards rose against the preceding quarter (+30%) and last year (+3%), fewer projects are actually making it to site. As such, the company says, these positive results “ring hollow”.
This cooling-off is acutely observed in a significant decline in detailed planning approvals, which saw their value slashed in half (-51%) compared to 2025 levels, falling by almost a third (-29%) during the review period.
Global markets are in a state of shock, prompted by the escalation of the US/Iran war, which has led to the closure of key trading routes, damaging investor confidence. This is likely to exacerbate the current downward spiral over the coming months.
Allan Wilen, Glenigan’s economics director, said: “Private investment and consumer spend has stalled. A general increase in the cost of living is squeezing household spending and denting homebuyers’ confidence, while investors are cautious given the weak economic outlook, stifling potential momentum in the property market and resulting in general wariness.
“The Iran War is exacerbating these pressures by stoking inflation and further weakening economic growth. Unfortunately, this situation is unlikely to end in the near term, with energy costs expected to remain high this year and the prospect of interest rates cuts fading fast.
“This growing culture of cautiousness is extending to contractors, subcontractors and product manufacturers alike, where higher oil prices are starting to cascade down the supply chain, raising energy, material, transport and on-site costs. Already battling against uncomfortable financial conditions, skills shortages and a deluge of complex regulations, it’s little wonder that many are keeping their powder dry until economic stability returns.”
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