UK Construction Starts Down 9% in January 2026  

The latest Glenigan Index of Construction Starts (covering projects under £100 million) for the three months to the end of January 2026 paints a cautiously mixed picture for the UK construction industry. Overall, the value of work starting on-site fell by 9% compared to the preceding three months, leaving construction project starts a significant 16% below 2025 levels. 

For construction professionals, site managers, project engineers, contractors and anyone tracking construction job opportunities in 2026, the data is the definitive guide to finding and securing the year’s best job opportunities. Whilst there is slight growth in commercial offices and education, the chronic weakness in residential construction continues to drag on overall industry momentum. 

Headline Construction Statistics: Q1 2026 

Here is a summary of the headline data from the latest UK construction industry report: 

• Overall Construction Starts: Total industry activity declined by 9% over the last three months, leaving output 16% lower than January 2025 levels. 
• Residential Sector Downturn: Housing starts saw a sharp 24% drop quarter-on-quarter, finishing 32% down compared to the previous year. 
• Non-Residential Growth: Defying the broader trend, non-residential project starts rose by 6%, marking a 7% increase year-on-year. 
• Utilities & Civil Engineering: While civil engineering remained stable, the utilities sub-sector experienced a significant growth surge, driven by national infrastructure requirements.

What This Means for Construction Recruitment and Contracts 

These shifts in the UK construction market are critical for project planning and construction recruitment strategies in early 2026. The data suggests a pivot in demand: 

1. Skills Shift: Workforce demand is migrating from traditional housebuilding to specialised civil engineering and utility projects. 
2. Contract Opportunities: Firms should target the non-residential pipeline, where project volume is currently outperforming residential schemes. 
3.  Market Resilience: Despite the residential slump, the surge in utilities highlights a robust area for long-term investment and job security. 

UK Housebuilding Market Analysis: 2026 Residential Sector Downturn 

The residential construction sector remains the primary drag on the UK industry’s overall performance. Latest figures show that overall residential starts plummeted by 24% in the most recent quarter, representing a staggering 32% decline compared to 2025 levels. 

Private Residential Construction: Sharpest Decline 

The private housing market has been most severely affected by the current economic climate: 

• Activity is down 38% compared to the same period last year. 
• New project starts fell by 30% against the preceding three months. 

This downturn creates a high-risk operating environment for construction firms reliant on housebuilding contracts and site managers overseeing new-build residential schemes 

Social Housing Recovery Stalls 

Social housing projects have failed to provide the expected counterbalance:  

• Output is currently lagging 9% behind both the previous quarter and year-on-year 2025 figures. 
• Funding and regulatory transitions continue to delay the commencement of new affordable housing developments. 

Why UK Housebuilding Starts are Stagnating 

The root causes of this “housing doldrums” are structural and driven by market caution: 

• Investor Hesitation: Private developers and institutional investors are pausing major commitments until stronger homebuyer demand signals emerge. 
• Affordability Crisis: Until mortgage affordability improves and buyer confidence is restored, a recovery in private starts is unlikely. 
• Policy Lag: While government planning reforms are in progress, their practical impact on site starts is not expected to be felt until later in 2026.  

Allan Wilen, Economic Director at Glenigan, highlights that there is “hope on the horizon” for the sector. The latest CIPS survey supports a cautiously optimistic outlook, noting that the contraction in UK construction activity is finally slowing as supply chains stabilise. This shift, marked by more predictable lead times and rising business confidence, suggests that the industry is preparing for a recovery despite the recent dip in project starts. 

For firms navigating the 2026 construction market, these indicators suggest the pipeline is stabilising. This moderation is often the first sign of a transition toward a growth cycle, particularly in the non-residential and infrastructure sectors. 

Non-Residential Construction: Office, Industrial, and Education Lead the Way 

Non-residential construction continues to demonstrate resilience, providing positive news for contractors, commercial fit-out specialists, and those tracking commercial construction job opportunities. 

Office Construction 

Commercial office construction remains on an upward trajectory, rising 7% against the preceding three months and an impressive 21% year-on-year.  

• For commercial construction professionals and specialist subcontractors in the office fit-out and M&E sectors, this sustained growth in office project starts represents a tangible source of ongoing work. 

Industrial and Distribution Construction 

Industrial construction remained robust, posting a 2% increase against the preceding three months and standing 10% ahead of last year.  

• The continued expansion of the UK’s logistics and distribution infrastructure reflects structural demand from e-commerce and supply chain investment, creating stable construction employment opportunities in the industrial build sector. 

Education Construction 

Education sector construction was a standout performer, rising 5% during the Index period and a remarkable 34% year-on-year.  

• For construction consultancies and contractors specialising in public sector projects, education represents one of the most active and growing areas of the current UK construction project pipeline. 

Retail, Hotel, Leisure, and Community 

Retail starts rose by 14% against the preceding three months but remained 13% below 2025 levels. Hotel and leisure starts climbed by nearly a quarter (24%) quarter-on-quarter, yet still sat 12% below the previous year. Community and amenity starts dipped slightly (3%) during the Index period but remained 4% ahead of 2025 figures. 

UK Regional Construction Performance 

Regional performance varied considerably across the UK during the period: 

• London was the clear standout, with construction starts rising 41% against the preceding three months and finishing 33% up year-on-year  
• East Midlands and North West delivered mixed results, rising quarter-on-quarter but still lagging behind year-ago figures. 
• West Midlands had a particularly difficult period, with starts falling 20% during the Index period and 23% year-on-year — 
• South East also struggled, declining 22% against the preceding quarter and sitting 15% below the previous year. 

What This Means for Construction Jobs and Hiring in 2026 

The Glenigan Index data has direct implications for those working in, or recruiting for, the UK construction industry: 

• Where construction job opportunities are strongest right now: Utilities and energy infrastructure, commercial office developments, education and public sector schemes, and industrial logistics projects offer the most active pipelines for construction work in early 2026. 
• Where caution is warranted: Private housebuilding and social housing remain deeply subdued. Infrastructure project starts have also fallen sharply. Contractors and trades professionals heavily reliant on these sectors will need to diversify their project exposure or consider pivoting towards growth areas. 

Glenigan Index Monthly Data Table: January 2025 – January 2026 

About the Glenigan Index 

The Glenigan Index is one of the UK construction industry’s most authoritative and widely cited barometers of construction project activity. Covering all project starts under £100 million, it provides monthly insight into the health of the UK construction sector across residential, non-residential, and civil engineering verticals.  

Frequently Asked Questions (FAQs) Construction Market 2026

Data source: Glenigan Index of Construction Starts to the end of January 2026. All figures relate to projects under £100 million in value.