UK construction starts fell 20% year-on-year in the three months to August, according to Glenigan, with only non-residential activity offering relief.
The value of underlying work – projects worth £100m or less – dropped 2% quarter-on-quarter and 20% below last year’s level, according to Glenigan’s September 2026 Construction Index, which covers the three months to the end of August.
Residential remained the weakest performer, with starts down 15% against the preceding quarter and 36% lower than a year ago. Private housing fell 8% quarter-on-quarter and 37% year-on-year, while social housing dropped 29% quarter-on-quarter and 30% year-on-year.
Non-residential provided the only source of growth, rising 6% quarter-on-quarter and standing 1% above last year’s level. Offices led the recovery, up 61% quarter-on-quarter and 44% year-on-year, supported by the £99m West One development in London. Industrial activity rose 37% quarter-on-quarter, helped by the £22m Panattoni Park warehouse scheme in Swindon, though it remained 2% below a year ago.
Civils work rebounded strongly, up 23% quarter-on-quarter but still 24% below last year’s level. Infrastructure starts rose 40% quarter-on-quarter but were 21% down year-on-year, while utilities activity increased 5% quarter-on-quarter but remained 27% below the previous year.
Allan Willen of Glenigan said: “After a rough start to the year, it’s fair to say the sector caught its breath over the summer and, whilst activity levels remain painfully low, they have stabilised. It’s a positive sign that the freefall, which began in Q2, has finally ground to a halt. That said, we’re not exactly climbing yet.
“The real bright spot is non-residential, but a fresh cabinet, headed up by a new prime minister with new priorities, could easily upset the apple cart. Even the sectors doing well have caveats attached. Office fit-outs continue to hold up, although with occupancy rates remaining stubbornly low, it begs the question of whether developers will keep backing new schemes. Meanwhile, residential remains a drag on overall activity, as developers weigh up site viability against higher construction costs and the looming building safety levy.”
Number 10’s renewed commitments to housebuilding could offer social housing a lift in the coming months, particularly if the Autumn Budget brings fresh public spending pledges for the sector. Whether this translates into starts on the ground in the short term remains to be seen.
Regionally, the North West led activity, up 46% quarter-on-quarter and 8% above last year’s level, followed by Yorkshire, up 43% quarter-on-quarter and 11% year-on-year. The South East posted the sharpest regional decline, down 29% quarter-on-quarter and 43% year-on-year, followed by the West Midlands, down 18% quarter-on-quarter and 41% year-on-year.
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