Main contract awards rose 17% in the three months to July, though project starts remained broadly unchanged, new data from Glenigan shows.
The findings come from the construction intelligence provider’s August 2026 Construction Review, which analyses data for the three months to the end of July 2026 against both the preceding quarter and the same period in 2025.
Main contract awards climbed 17% against the previous three months and were up 169% year-on-year, a rise Glenigan linked in part to activity in the healthcare sector, where several schemes in the New Hospital Programme – including Leighton Hospital and Frimley Park Hospital – reached the contract-awarded stage.
Detailed planning approvals increased by 10% against the previous quarter, though they were down 3% compared with the same period last year.
Project starts fell 7% against the preceding three months but were unchanged compared with 2025, ending a lengthy period of decline. Glenigan attributed the more muted picture on starts to subdued investor confidence and continued uncertainty around public spending.
Allan Wilen, economics director at Glenigan, said: “There are plenty of reasons for readers to be cheerful when going through the August Review, especially following such a tumultuous and unpredictable six months. Whilst a degree of uncertainty persists, labour and material costs are stabilising. Industry prospects appear to be turning a corner, but, before we get too excited, these green shoots are fragile and, as we’ve seen before, could wither away on the merest market change.”
Residential project starts fell 39% year-on-year, even as main contract awards rose 60% and planning approvals eased back 22%. Private housing starts dropped 52% to £2,434m, private apartments fell 23% to £1,630m, and social sector housing starts declined 27% to £821m.
London led starts by value at £1,250m despite a 16% fall, while the North West was the most stable region, down just 1% to £962m. Wales bucked the wider regional trend with strong growth in planning approvals.
Office starts fell 3%, but approvals rose 54%, driven by the £20m-£50m band, up 18% to £627m, and the £50m-£100m band, up 80% to £361m. Hotel and leisure awards rose 787% and approvals climbed 56%, though starts fell 17%. Industrial starts fell 43%, but approvals rose 147%. Retail starts fell 16% while awards rose 72%.
London led office starts, up 30% to £1,531m. The East of England led industrial starts, up 218% to £465m.
Health led public sector activity, with starts up 32%, awards up 634% and approvals up 65%, driven by the New Hospital Programme. Hospital starts rose 75% and made up more than half of health starts, while nursing homes and hospices starts rose 44%.
Community and amenity awards rose 182% and approvals rose 95%, despite a 34% fall in starts, with military projects up 466%. Education starts fell 44%, though awards rose 204% amid the Schools Rebuilding Programme.
Civil engineering starts rose 171% year-on-year and awards climbed 85%, while planning approvals fell 37%. Roads accounted for around 30% of activity, with harbour and port projects also performing strongly.
The South East led starts at £6,009m, up 844% and around two-thirds of the sector total. The North East led approvals, up 688% to £3,069m.
Wilen added: “The construction supply chain should stay mindful that the recovery will be shaped by wider economic conditions, investor confidence and public sector spending priorities. Remember, in spite of the excellent main contract awards and planning approval figures, conversions into actual starts remains the litmus test of the sector’s performance over the back end of the year.”
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