Glenigan Forecasts 2027 Recovery

In Glenigan’s Autumn 2026 Construction Forecast, it is expected that the year will finish on a low note, posting an overall decline of -13% for 2026, lower than expected earlier in the year.

The downward revision is due to persistent socio-economic turmoil, ongoing international conflict and lingering political uncertainty, which the new Burnham-led government has yet to overcome, Glenigan says.

Private sector work has been hit hardest, with fluctuating financial viability affecting many schemes. Build costs are high, lending has tightened and demand has softened in some sectors. As a result, numerous projects have been redesigned, delayed or cancelled.

Looking to Recovery in 2027

Focused on underlying projects under £100m in value, Glenigan predicts an industry-wide uptick in activity in 2027 of +11% and in 2028 of +7%.

It expects sustained growth to emerge, supported by increased public sector spending and an improving private sector investment in residential and commercial projects.

The forecast points to public spending delivered through the School Rebuilding Programme, the New Hospital Programme and water investment under AMP8. Social housing is also expected to grow in both 2027 and 2028.

Increased public sector investment is expected to stimulate the private sector, with delayed projects revived and new project starts increasing.

Private residential, one of the hardest hit sectors in the past two years, is expected to gradually recover from 2027 as confidence improves among house buyers. This improvement will likely translate into the retail, and hotels & leisure as greater discretionary spending is unlocked for many households, with modest improvement.

Industrial is expected to bounce back from a 14% drop in 2026 with a 4% rise in 2027. Commercial offices are expected to grow 11% in 2027 and 8% the year after, as refurbishment and remodelling projects are signed-off.

This will be coupled with an anticipated spike in construction of hyperscale data centres as businesses are expected to invest heavily in AI capabilities and with the public’s appetite for digital media becoming more prolific.

Sustained Recovery

Looking ahead, Allan Wilen, Glenigan’s Economic Director, said: “Momentum is picking up, particularly as funds from the Spending Review are released and public projects, utilities upgrades and critical infrastructure investment gradually start to come online.

“We believe this, combined with impetus in specific private sector niches like offices and data centres, will have a fortifying effect across the rest of the industry. It could potentially spark a chain reaction leading to sustained recovery in the second half of next year, which may be maintained throughout 2028.”

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