Project Starts Drop Off Amid ‘Cooling’ Construction Sector

The latest data from Glenigan points to a cooling UK construction sector, with activity becoming increasingly uneven across the project pipeline.

While main contract awards rose against the preceding quarter and previous year, fewer new projects are progressing through planning and into starts, pointing to a more cautious stance from clients and developers.

Sector Analysis – Residential

Construction activity on projects under £100 million declined in March’s Glenigan Index, with residential construction starts falling 13% in the preceding three months to finish almost a third (-30%) on 2025 figures.

Private housing construction starts declined by 9% against the preceding three months and by 34% against the previous year. Meanwhile, social housing starts were similarly depressed, dropping by roughly a quarter (-24%) against the preceding three months and by 16% against the previous year.

Sector Analysis – Non-Residential

Offices were the only vertical to experience a growth spurt compared to the previous quarter, up 37%, to stand over two-thirds (+67%) above 2025 levels. This uptick in activity was primarily supported by the £50 million 105 Old Broad Street office development in the City of London.

The only other vertical to increase against the previous quarter was Retail, which rose 12% against the preceding three months. However, this modest leap wasn’t enough to bring it above last year’s results, falling 17% by comparison.

Hotel & Leisure and Education had a mixed period, with both falling by around a quarter (-25% and -24% respectively) compared to the previous quarter. However, both finished up when measured against last year, rising 1% and 23% respectively.

Elsewhere, performance plummeted. Industrial experienced an especially lacklustre period, nosediving by 36% against the preceding three months to stand 31% below the previous year.

Likewise, Health declined 16% against the preceding three months to stand 13% lower than the previous year. Community and Amenity project starts, which has recently posted positive results, is now in recession, falling by 37% against the preceding three months to stand 10% down against the previous year.

Sector Analysis – Civils

The bottom fell out of Civils, with work starting on site cascading 37% against the preceding three months and falling 34% against the previous year.

Breaking it down, Infrastructure work starting on site declined 32% against the preceding three months and declined by 37% on the previous year.

Similarly, Utilities declined 42% against the preceding three months and by 30% against the previous year.

Regional Outlook

According to Glenigan’s regional data, the performance picture was inconsistent.

Once again, London was the standout performer, experiencing a strong performance, rising 26% against the preceding three months to stand 69% up against the previous year. This was underpinned by a strong performance from the Office sector, which helped drive growth in the region.

It was more of a mixed bag for some of the regions. Northern Ireland experienced a mixed performance, dipping 2% against the preceding three months to finish 37% up against the previous year.

The North East performed similarly, dropping 27% against the preceding three months to stand 16% up compared to 2025 levels.

It was a less positive story for the remainder of the UK. Particularly in the South West, where performance crashed, falling 47% against Q4 to stand 54% down against the previous year.

Not to be outdone in the disappointment stakes, the West Midlands also experienced a poor period, declining by 37% against the preceding three months to finish 39% lower than last year’s figures.

Finally, the South East performed poorly, declining 22% against the preceding three months to stand 27% down against the previous year.

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