Glenigan records yet another dismal month for the sector as international conflict escalates

• Starts on-site see value slashed by over a third (-39%) compared to the previous three months, finishing 26% lower than 2025 levels
• Main contract awards tumbled by 26% against last year’s figures, down by 17% against the preceding three months
• Detailed planning approvals see a 15% reduction in value over the Review period, recording a 16% drop on the previous year’s performance.

Today, Glenigan | A Hubexo Company (Glenigan), one of the construction industry’s leading insight and intelligence experts, releases the March 2026 edition of its Construction Review.

The Review focuses on the three months to the end of February 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.

The March edition of the Glenigan Construction Review offers no respite to a sector caught in a downward spiral of poor market conditions, with decline recorded across the board.

Projects starting on-site were down by a staggering 39% compared to the preceding three months and by 29% against 2025 figures.

Main contract awards told a similarly sorry tale, plummeting 36% year-on-year to finish 17% lower than the previous three months.

Slightly less severe, but equally disappointing, detailed planning approvals dropped by 15% compared to the preceding three months to stand 16% below last year’s numbers.

International turmoil dashes recovery hopes

The recent explosion of conflict in the Middle East and the ongoing socioeconomic turbulence it’s caused are only adding to UK construction’s many frustrations. With little sign of things drawing to a conclusion any time soon, it only adds another burden on top of an industry being slowly smothered by persistent affordability pressure, a subdued planning environment and low business confidence.

Unsurprisingly, the investment landscape, which was beginning to thaw, is, once again, becoming increasingly chilly. Whilst Government spending commitments remain intact, the uncertainty presented by the US/Israel-Iran War could call even the firmest funding agreements into question.

With world events playing out in real-time, contractors and subcontractors can only look on and develop contingency plans to remain resilient in the face of further downturn.

As Glenigan’s Economics Director, Allan Wilen says, “We’re in a deeply worrying position where market volatility means prices are erratically fluctuating on a daily basis, dictated by the direction of international affairs. As our results show, the decline in construction activity has deepened and hopes for a recovery in the second half of the year now hang in the balance.

He adds, “It doesn’t bode well for currently weak verticals, especially the private residential sector which will likely continue to slide. Equally concerning, those areas where we’ve seen relative performance gains are seeing this growth put at risk. This all makes existing pipelines extremely fragile with no guarantee that signed and sealed projects will be delivered to agree dates.

“However, whilst the entire supply chain will be nervously observing the situation, this is definitely not the time for firms to be sitting on their hands. Crucially, they must assess the vulnerability of their order books to delay, and higher construction costs, to scan the horizon for new projects to offset possible workload gaps.”

Taking a closer look at the highlights and lowlights…

Making plans for future growth

Civil engineering experienced a challenging three months to February, with project starts plummeting 86% compared with the preceding three months, while main contract awards declined 18% over the same period. Whilst all three metrics fell on a year-on-year basis, detailed planning approvals surged 92% compared with the previous quarter providing a strong signal of future recovery.

This indicates the outlook, at least in this vertical, is more encouraging, with infrastructure workloads expected to strengthen gradually, supported by increased road and rail investment from 2026/27 onwards.

Energy accounted for the largest share of starts at 35%, though activity fell 40% year-on-year. Roads represented 14% of starts, declining 54%, while airports recorded the only major uplift, rising 703% year-on-year. Regionally, the North East was the most active for project starts at 17% of total activity, up 57% year-on-year. In planning approvals, the North West led with 27% of total approvals, increasing 177% year-on-year, while Scotland held 24% of approvals with a 30% annual rise.

Learning to get better

The education sector experienced a mixed period in the three months to February, with project starts rising 23% year-on-year whilst main contract awards declined 21% and detailed planning approvals fell 14% compared with the previous year. Despite this uneven performance, the future appears refreshingly positive, with ongoing policy commitments to address the ageing school estate supporting future activity through the school rebuilding programme.

Schools accounted for the largest share of starts at 81%, rising 51% year-on-year, whilst universities represented 11% of starts, declining 24% on the previous year. Colleges fell 39% year-on-year.

London was the most active region for project starts at 22% of total activity, rising 217% year-on-year, followed by Scotland at 15% with 203% growth. In planning approvals, Scotland held the largest share at 34%, increasing 153% year-on-year, whilst the North East and Yorkshire & the Humber delivered significant uplifts, rising 156% and 225% respectively.

Out of office

The office sector delivered strong project starts in the three months to February, rising 54% year-on-year. However, the pipeline showed signs of weakening, with main contract awards declining 14% and detailed planning approvals falling 28% compared with the previous year, suggesting the robust performance experienced in recent months may be tailing off.

All value bands experienced growth in project starts. Projects over £100 million rose 62%, schemes between £50 million and £100 million grew 27%, whilst projects between £20 million and £50 million rose 40%. London dominated office project starts, accounting for 63% of activity after a 70% rise, supported by major schemes including the Row One development at Red Lion Court in Southwark. The South West also recorded a sharp uplift, rising sixteen times higher than a year ago, driven by the 90-acre technology campus for US healthcare software company Epic, between Long Ashton and Bristol. In planning approvals, London led despite a 43% annual decline, whilst the South East performed more strongly, rising 112% year-on-year, and the North East saw exceptional growth, climbing tenfold.

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