Market
Project starts fall 29% on the year as civils lifts
By Staff Writer | 11 August 2026
The value of underlying work starting on site fell 11 per cent over the three months to July and sits 29 per cent below the same period last year, with civil engineering the one vertical showing momentum.
The August construction index, published this month by the data provider Glenigan, covers projects valued at £100m or less over the three months to the end of July, seasonally adjusted. The quarterly fall is slightly shallower than the previous edition recorded, but the annual comparison is worse, and last year was itself below 2024.
Residential remains the drag. Overall housing starts fell a quarter against the preceding three months and 46 per cent against last year. Private housing was cut by a fifth quarter on quarter and almost in half over the year. Social housing fell by a third and by 38 per cent respectively.
Civil engineering starts rose 34 per cent quarter on quarter, with infrastructure up 24 per cent and utilities up by half.
Where the money is moving
Offices were the outlier on the non-residential side, rising 25 per cent against the preceding quarter and 34 per cent against last year, the only vertical to beat 2025. Industrial work rose almost a third quarter on quarter, helped by a £74m storage and distribution scheme in Leicestershire, though it remains 6 per cent down on the year.
The civils uptick reads as Spending Review money beginning to reach the ground, with a £74m river crossing in Oxfordshire and a £68m flood protection scheme in Dumfries among the projects behind it. Even so, the vertical sits 15 per cent below a year ago, so the recovery is from a low base rather than a turn in the cycle.
Education had a poor quarter, down 42 per cent, and retail fell 30 per cent. Health held broadly steady as hospital programme funding was released. Regionally, London was resilient, off 5 per cent on the quarter but 1 per cent up on the year. Northern Ireland fell 52 per cent, the South East 27 per cent and Scotland 20 per cent.
Try as it might the sector continues to be held back by external factors beyond its control, with a changing of the guard at the top of Government being the latest in a string of extraordinary events.
Yuliana Ivanykovych, Glenigan
She added that key barometers such as residential construction remain depressed with little immediate sign of movement before the end of the quarter, and that global market uncertainty may temper any policy-driven improvement.
What it means for the contract
A market where starts fall while a few verticals climb is a market where tender lists lengthen and margins thin, and that shows up in contract terms before it shows up in accounts. Contractors chasing scarcer work accept amendments they would have refused two years ago: tighter notice provisions, wider fitness obligations, caps that do not match the risk taken.
The pattern is familiar to anyone who worked through the last downturn. Work priced in a soft market is delivered in whatever market arrives, and the claims follow the gap between the two. Where private investment stalls mid-scheme, suspension and termination clauses that were never read become the most important pages in the contract.
For the civils firms picking up the new infrastructure work, the immediate question is resource. Utilities and infrastructure rising together pulls on the same plant, the same crews and the same design capacity, and the programme risk lands on whoever committed to a date first.
The industry will be reading the next few weeks of policy announcements closely. Until investment decisions follow, the numbers will keep saying what they say now.