Positive Results Belie Struggling Construction Sector, According to Glenigan Review

Glenigan | A Hubexo Product (Glenigan), one of the construction industry’s leading insight and intelligence experts, has released the May 2026 edition of its Construction Review.

The May Review focuses on the three months to the end of April 2026, covering all major (>£100m) and underlying (<£100m) projects, with all underlying figures seasonally adjusted.

Looks can be deceiving; on first appearance there are reasons to be cheerful. Superficially, the May Review presents a sector rebounding, with detailed planning approvals rising by 8% against the preceding three months, complemented by a stronger 29% increase in main contract awards and a 22% uplift in project starts.

However, scratch beneath the surface and a different picture emerges, when these figures are compared against the previous year’s result. Detailed approvals hit rock bottom, nose-diving 54% year-on-year, while main contract awards have slipped 11% and project starts are 17% lower.

It highlights how the UK construction sector remains stuck in the woods with little current direction to guide it out. Looking ahead, the industry’s trajectory will continue to be shaped by wider economic and policy developments. Elevated borrowing costs, ongoing viability challenges and cautious investor sentiment have constrained activity over the past year.

According to Glenigan’s Economic Director, Allan Wilen, “Whilst this encouraging uptick will come as some relief after months of decline, the sector must not risk falling into a fool’s paradise. The true impact of the US/Iran War is yet to be felt and, if it’s anything similar to previous major global events, then the aftershock will ripple through markets, causing disruption well after the conflict, hopefully, comes to an end. An early resolution of the current impasse and the ending of the Strait of Hormuz blockade would start to rebuild investor confidence and ease pressure on the construction industry.

“However, last week’s King’s speech provides some clarity to latch onto and, once the Downing Street shenanigans have died down, a degree of certainty may return to help get us back on track. There are windows of opportunity in niche areas which savvy contractors are already involved in, or starting to wake up to. So, whilst the outlook remains overcast, it’s not a time to stand and stare, but to seize opportunity where it exists to weather the current climate and be ready for the sunshine when it eventually arrives.”

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Residential

Residential held its ground during the three months to April, with project starts dipping just 2% year-on-year while main contract awards climbed 9% and detailed planning approvals jumped 17% on 2025 levels. Quarter-on-quarter performance was even more upbeat, buoyed by major projects coming to the fore. Social Sector Housing stole the show, accounting for 51% of starts and rocketing 236% year-on-year, though private housing and private apartments told a different story, falling 45% and 56% respectively. The wider outlook is finely balanced: Nationwide reported a 3% lift in house prices, while Halifax noted a dip amid geopolitical jitters, and both will likely shape residential construction in the months ahead.

Regionally, Yorkshire & the Humber led the charge, with project starts powered largely by sizeable social housing heating works in Leeds. London also enjoyed a strong run, cementing its status as a key residential market. Elsewhere the picture was patchier, with the South East, East Midlands and Scotland all sliding back against the previous year.

Non-residential

Non-residential was a real mixed bag during the three months to April. Offices put on a show, with project starts soaring 217% year-on-year on the back of an eye-catching 868% rise in major schemes worth over £100 million. Detailed planning approvals climbed 30%, though main contract awards slipped 57%. Hotel & Leisure also offered cheer, with planning approvals leaping 80%, even as starts dipped 3% and awards eased 29%. Health saw approvals rise 32%, hinting at a pipeline gathering pace despite a 39% drop in starts. Retail, Education & Industrial were broadly muted, while Community & Amenity had a tough time of it, with starts down 60% and contract awards tumbling 83%.

Regionally, London ruled office activity, lifted by the British Library Extension development. Scotland topped Hotel & Leisure starts after strong year-on-year growth, while Wales emerged as a Health hotspot with starts up 748%. Scotland also led Education starts (+68%), with the North West taking top spot for both Retail and Community & Amenity.

Civils & Infrastructure

Civil Engineering had a tough quarter, with project starts tumbling 72% year-on-year and detailed planning approvals diving 87% against the previous year. Main contract awards offered a flicker of stability, holding steady against 2025 levels in an otherwise challenging period. The numbers point to a clear slowdown in project initiation, though there’s brighter news further out, with expected investment in road and rail infrastructure from 2026/27 set to lift activity, alongside continued spending in utilities and the water industry. Roads projects led the way despite a hefty decline, while water-related schemes brought welcome stability, and harbour and ports work also slipped back.

Regionally, the East of England led the field on project starts, scooping 35% of total value following a 133% year-on-year rise. The East Midlands topped planning approvals with a 31% share, up 31% on the previous year, though the region itself saw a moderate 6% dip in starts. London experienced a similar 5% dip in starts.

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