Residential construction activity continued to weaken in the third quarter of 2026, with project starts falling by 8% compared with the previous three months and 33% year on year. The figures come from the October 2026 edition of Glenigan’s Construction Index.
Private housebuilding remained the largest contributor to residential construction activity, with some signs of improvement. Starts in this sector increased by 4% compared with the previous quarter, although they were still 32% below the level recorded a year earlier.
Social housing experienced a sharper decline. Project starts dropped by 33% over the quarter and 35% compared with the same period last year.
Non-Residential Construction Also Declines
The report found that overall construction activity fell by 2% in the three months to the end of September 2026. Projects covered by the index, which includes schemes worth up to £100 million, were down 18% compared with the previous year.
Non-residential construction starts decreased by 15% against the preceding three months. Retail and hotel and leisure developments recorded some of the largest falls.
Civil engineering offered a more positive picture, with project starts rising by 101% over the quarter.
Industry Outlook
Allan Willen, Glenigan’s economic director, said the increase in civil engineering work had helped offset weaker activity across residential and non-residential construction.
He noted that private housing starts had stabilised compared with the previous quarter but remained significantly below their level a year earlier.
Looking ahead, Willen said the new first-time buyer scheme announced by the Prime Minister could help restore confidence in the housing market and support a recovery in private housebuilding over the coming months.
He also highlighted the importance of the upcoming Budget, saying greater certainty for developers could help stalled construction projects move forward.
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