Construction Output Creeps Up in February

Monthly construction output is estimated to have grown by 1.0% in February 2026.

This was driven by a small jump in new work and repair and maintenance, which rose by 1.0% and 0.9%, respectively.

These monthly figures from the Office for National Statistics follow an upwardly revised increase of 0.5% in January 2026, and a downwardly revised decrease of 1.3% in December 2025.

However, total construction output still fell by 2.0% in the three months to February 2026, marking the fifth consecutive fall in the quarterly series.

Over the three-month period, new work fell by 3.4%, while repair and maintenance showed no growth (0.0%).

At the sector level, six out of the nine sectors fell in the three months to February 2026, dragged down by private new housing, which fell by 6.5%.

COMMENT

A Welcome Tonic to Industry

Richard Cook, Senior Economics Director at Pegasus Group, commented: “After four consecutive months of falling construction output figures, today’s numbers are a welcome tonic to an industry which has long struggled through mounting headwinds.

“The rise could, in part, be due to long-awaited changes to the NPPF, which are set to cut the extensive planning delays which have bogged down the industry for years. With further changes set to be announced in the summer, there’s a chance things might finally be changing for the better.

“Naturally, any green shoots will be contending with several crucial economy-wide pressures. The conflict in Iran, for example, will undoubtedly have a drastic effect on the UK economy, which would be passed onto the construction industry. If this leads to a UK recession, housebuilding in particular could face a substantial downturn, which would seriously hurt the Government’s chances of building 300,000 homes a year – a target it is already struggling to hit

“Even without a recession, the UK’s barely growing economy has already taken a beating from the ongoing conflict, which will naturally hit the construction industry further. The IMF recently claimed the UK will be the hardest hit by conflict out of any advanced economy globally, downgrading its estimate for UK growth in 2026 to only 0.8%. Put simply, the already dire situation facing the Chancellor has only gotten worse.

“While rising construction outputs is a good sign, the Government must understand that past performance is not indicative of future results. Further intervention from the Government is still needed to protect this crucial sector.”

Complex Mix of Pressures

Njy Rios, Partner at Ayming UK, said: “The drop in quarterly construction output underscores the persistent challenges facing the sector: rising material costs, ongoing uncertainty, and growing labour shortages. What’s more concerning is that these figures reflect the situation before the recent escalation of the conflict in the Middle East, meaning supply chain disruption and delays to material availability are likely to further slow momentum in the months ahead.

“Construction is one of the largest sectors in the UK economy, and while the government is making the right noises around planning reform and its long-term infrastructure strategy, the industry is contending with a complex mix of pressures. Alongside rising input costs and constrained supply chains, access to the right skills and talent remains a critical challenge. Our own research found that 47% of construction leaders see a lack of available skills as the biggest barrier to innovation, with nearly a quarter identifying it as their top priority for 2026.

“Ultimately, growth in construction depends on both resilience and capability. Without addressing supply pressures such as material shortages and cost inflation, as well as building a sustainable talent pipeline, even the most ambitious infrastructure plans risk stalling before they begin. A stronger focus on vocational training and skills development will be essential to ensure the sector can weather the current challenges and bounce back.”

Modest Growth

Dr David Crosthwaite, BCIS Chief Economist, said: “Monthly construction output saw growth in February, largely driven by a 4.3% rise in private new housing. Housing R&M activity was also up although the majority of works across the new build and R&M sectors continued to fall both annually and on a quarterly basis.

“The real concern, however, is to what extent the US-Israel conflict with Iran impacted output in March. We’ve already seen from sentiment surveys and anecdotal evidence that client confidence has waned since the start of the war. Given the Bank Rate was held at 3.75% last month and inflation is expected to increase, I suspect next month’s data will show modest output growth at best, with a contraction the more likely outcome.”

>> Read more about construction output in the news