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Glenigan Review: Starts Stall But Contract Awards Point to Recovery
Glenigan | A Hubexo Product (Glenigan), one of the construction industry’s leading insight and intelligence experts, has released the September 2026 edition of its Construction Review.
The September Review focuses on the three months to the end of August 2026, covering all major (>£100m) and underlying (<£100m) projects, with all underlying figures seasonally adjusted.
It’s a report providing a detailed and comprehensive analysis of year-on-year construction data, giving built environment professionals a unique insight into sector performance over the past year.
According to Glenigan’s data, the September Review reveals a sector struggling under considerable strain as it contends with socioeconomic and political headwinds on several international and domestic fronts.
Project starts, the industry’s most reliable performance barometer, nosedived 49%, reflecting the persistently low levels of activity commencing on site which has characterised UK construction since the start of the year. If that wasn’t depressing enough, there is also significant ground to be made up year-on-year with starts plummeting 28% compared to 2025 levels, which were already lagging behind 2024 figures.
A 13% decline in detailed planning approvals against the previous year and a drop of 7% against the preceding three months, show that the UK construction sector remains subdued. Planning departments are under real strain, with budget cuts, restructuring and staffing shortages slowing decisions at local level. Regulation is reshaping behaviour too. The second staircase requirement, which comes into force at the end of September, is likely prompting some developers to pause or redesign affected residential schemes. The new Infrastructure Levy has left developers evaluating viability before they commit. These pressures suggest the fall in approvals reflects a planning system working through structural, administrative and regulatory change all at once.
However, whilst there appears to be a collective short-term failure to launch, there are rumblings that the sector is getting ready for lift off. This is evidenced by a resilient period for main contract awards climbing by 45% over the quarter, and soaring 120% year-on-year, indicating a continued strengthening of the pipeline.
This impressive growth spurt can largely be attributed to a leap in contracts awarded for major projects and infrastructure-related schemes entering the construction pipeline including detailed plans for the £126 million A40 Bus Lanes and Active Travel Development; it provides encouragement for future work and suggests demand for major construction projects remains healthy in several areas of the market.
Looking ahead, the industry’s performance is likely to remain influenced by economic conditions, financing availability and investor confidence.
Commenting on the September 2026 Construction Review, Allan Wilen, Economics Director at Glenigan says, “UK construction activity remained subdued over the last few months with fewer projects starting, reflecting a market still weighing up its options. Yet there are reasons for cautious optimism, especially the impressive rise in contract awards, with the dial shifting on the back of major project commitments and infrastructure schemes, providing a morale boost for clients and investors.
“The public sector is doing a lot of heavy lifting, with health leading the way as hospital schemes and new wellness centres progress, while community projects, particularly military and blue light, are building real momentum. No doubt a 10.6% year-on-year rise in public investment will show the sector at large that Government money is starting to reach live projects, whilst the sharp rise in office planning approvals is a green shoot worth keeping an eye on.
“The wider picture is showing tentative signs of life, with GDP growing 0.3% in June after stagnating in April and May. However, the same old challenges are still felt across the sector and much depends on seeking out opportunity in a landscape of fluctuating economic conditions, shaky financing availability, high borrowing costs and lukewarm investor confidence in the months ahead.”
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Residential: soft starts, stronger signals ahead
Residential activity stayed subdued throughout the period. Project starts fell sharply, down 33% year-on-year and lower than the previous quarter, as housebuilders held back against a difficult backdrop. However, there are indications that the dial is moving. Main contract awards jumped 77% on a year ago, supported by growth in both major and underlying projects, though they eased against the previous three months. Detailed planning approvals rose 7% year-on-year, pointing to a healthier medium-term pipeline despite the weaker activity on site.
Most sub-sectors slipped back. Private housing held the largest share at 47%, yet fell 34% year-on-year to £3,155 million. Private apartments dropped 21% to £1,525 million, while social sector housing declined 33% to £1,161 million.
There were bright spots amongst the overall gloom. Detailed plans were approved on the £600 million Borough Triangle development in London, with a main contractor still to be appointed and completion due in Q3 2034.
Non-residential: pipeline promise, patchy delivery
Commercial performance experienced spikes in activity. Office starts fell 24% year-on-year and contract awards dropped by the same margin, as major project activity thinned. Yet planning approvals surged 147% on the back of several large schemes, strengthening the sector’s future pipeline considerably.
Retail project starts edged up 4% year-on-year and contract awards leapt 236%, but approvals slipped 11%, hinting at a more subdued pipeline in the future. Supermarkets drove the gains, up 69% to £264 million and taking a 70% share, while shops fell 59% to £68 million and shopping centres grew more than ninefold to £32 million.
Hotel and leisure starts eased declining just 2% on a year ago, though they fell 13% against the previous quarter. The standout was contract awards, which soared 761% year-on-year following a run of major projects, while approvals grew 24%.
Public sector: health leads a broad pipeline lift
The public sector offered the clearest signs of momentum. Health led the way, with starts up 13% year-on-year and detailed planning approvals rising 71%. Main contract awards climbed a remarkable 1,852%, pointing to a rapidly expanding pipeline underpinned by major healthcare investment programmes. Hospitals accounted for the largest share at 43% of starts, up 18%, while dental, health and veterinary centres grew fastest at 104%.
Education starts fell 33% year-on-year, but the forward view suggests improved prospects. Contract awards rose 84% against the previous year but approvals stayed flat, suggesting improving future workloads. Schools dominated at 79% of starts despite a 34% fall, while universities grew 68% year-on-year. Ongoing estate refurbishment and rebuilding programmes should help to sustain activity.
Community and amenity strengthened, with starts up 25% and approvals surging 123%. Contract awards dipped 14% year-on-year but improved sharply on the quarter. Military projects led with the largest share (34%), up more than tenfold year-on-year to £200 million, ahead of prisons which increased 13% at £178 million and blue light schemes surging 86% at £113 million.
Civils and infrastructure: near-term dip, long-term strength
Civils and infrastructure felt the squeeze. Civil engineering starts fell 28% year-on-year, with contract awards down 35% and planning approvals freefalling 67%, signalling a softer development pipeline and reduced near-term visibility. The quarterly picture was starker still, as starts dropped 80%, awards fell 28% and approvals declined 36%.
Roads projects recorded the highest level of activity, accounting for 33% of total starts and gaining traction rising 22% against the previous year. Longer-term prospects hold firm, supported by planned investment across transport, utilities, energy and environmental infrastructure.
Industrial activity weakened considerably. Project starts plunged 49% year-on-year and contract awards eased with a modest decline at 9%, reflecting reduced near-term workloads. But planning approvals had a buoyant period rising 16%, driven by major projects, hinting at a stronger development pipeline ahead. Every sub-sector lost value: manufacturing led with a 56% share yet fell 57% to £744 million, warehousing and logistics dropped 35% to £528 million, and other industrial slipped 7% to £49 million.
