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UK construction sector outlook for 2025–2026
A clearer view of the UK construction sector
The UK construction sector has been working through slow demand, high interest rates, and tough cost pressures. Glenigan’s forecast gives you a clearer view of what the next two years look like. The data points to steadier activity, better confidence, and a market that is slowly moving back to predictable work. This matters if you run a construction company, supply glazing, install windows and doors, manage fit-out projects, or support the wider construction industry.
Why is stability returning
The picture is improving because the wider UK construction industry is shifting out of the stop-start cycle seen since the pandemic. Inflation has eased. Borrowing costs are not rising anymore. Consumer spending is slowly lifting. The Bank of England has more room to adjust the base rate, which helps the housing market. Local authorities are preparing new public sector budgets. Firms are planning with more confidence, and developers are revisiting paused schemes. These changes support economic growth and reduce the strain on supply chain planning and construction output.
What the latest forecast actually shows
Glenigan’s report points to three simple movements. First, private housing should lift early because new orders are rising and lenders are offering more stable mortgage products. Glenigan expect private housing starts to rise by 13% in 2025 and a further 15% in 2026, helped by better incomes and lower borrowing pressure. Second, civil engineering has one of the strongest pipelines due to water upgrades, renewable energy, and utility work. Third, the public sector is expected to progress more schemes once the Spending Review is settled.
Retail, leisure, supermarkets, and refurbishments linked to energy performance rules also provide steady work. Although commercial new build remains mixed, activity linked to fit-out, data centres, and modern office upgrades is rising.
How does this affect your business in practical terms
Housing growth helps installers, glazing firms, heating engineers and finishing trades. More sites mean more demand for frames, doors, roofs, electrical work and internal fit-outs. Stronger civil engineering benefits groundworkers, drainage teams, steel suppliers, and contractors who support water firms and energy networks. Public work helps firms seeking a predictable cash flow. Better stability reduces stress tied to long lead times, labour shortages, and labour costs.
These conditions allow you to plan stock levels, manage staffing, and stabilise production. They also support companies involved in commercial construction, refurbishments, and regional projects affected by regulatory changes and the building safety regulator.
A construction team reviews plans on a live housing site at dawn.
Housing is still the core driver
Private housing remains central to the forecast. Lower borrowing costs and more stable mortgage deals support buyer confidence. Developers are revisiting sites paused in 2023–2024. Stronger demand also helps trades involved in insulation, joinery, glazing, roofing, heating upgrades and internal work. Growth in the housing market often flows directly into the construction sector and helps firms reduce the instability seen during earlier economic headwinds.
Public sector work should ease back into motion
Many public schemes stalled during the election cycle. Glenigan expect improvement across schools, hospitals, community projects, and the affordable homes programme. This matters if your firm depends on reliable tender pipelines or structured workloads. There is also demand linked to road repairs, RAAC replacements, and compliance rules tied to the national statistics framework. Firms supplying windows, fire doors, cladding, ventilation, and energy-saving upgrades will see steady opportunities.
Civil engineering offers one of the strongest pipelines
This part of the construction industry continues to show strong momentum. Water companies are investing heavily in pollution control and capacity upgrades. Renewable energy projects are expanding. Local network improvements are rising due to the wider economy and pressure on regional infrastructure. This benefits firms in structural work, drainage, aggregates, utilities, grid connections, and energy-linked installations. These projects are less sensitive to the housing market, giving many contractors a stable counterbalance to private work.
Civil engineering workers carry out water pipe upgrades on a live site.
Commercial, retail and leisure are slowly recovering
Commercial construction is mixed but improving. Office refurbishments are gaining traction as employers redesign spaces for hybrid working. Data centres are expanding due to digital demand. Retail and leisure are supported by stronger household budgets. Firms in M&E, joinery, flooring, signage, internal fit-out, and external upgrades will see growing opportunities.
This movement also supports suppliers tied to material costs, compliance, refrigeration, lighting, and safety systems.
What risks should you watch in 2026?
Even with better conditions within the UK construction sector, there are clear risks. Staff shortages remain a real issue because the supply of trained workers has not kept pace with demand. Many older workers left the industry, and fewer young people entered the construction industry training routes. Import delays tied to trade wars, shipping pressure, and the negative impact of international conflict can still interrupt schedules. Some items have strict maximum storage or maximum storage duration rules, which limit stockpiling.
These risks do not stop growth, but they shape how you plan.
How can digital tools help firms stay steady?
Simple planning tools give clearer oversight of workload, margins and delivery dates. CRMs help track tenders. Scheduling tools protect projects from delays when the private sector and public sector shift demand. Cost systems help control construction costs. Digital forecasting also helps companies avoid relying on a single type of work. This supports steadier delivery and gives firms more certainty when facing cost pressures.
For international businesses looking to enter the UK construction market, leveraging these digital tools offers a distinct advantage by streamlining operations, ensuring regulatory compliance, and enabling better coordination with local partners, making market entry smoother and more competitive.
Which sector should your business focus on first?
You and the UK construction sector focus first on housing and civil engineering because these sectors have the clearest growth signals. Housing brings faster project starts, while civil engineering offers longer programmes tied to utilities. Together, they help balance risk and give your firm more predictable work.
The government plays a crucial role in supporting the UK construction sector by investing in infrastructure projects, setting housing targets, and offering incentives that stimulate demand in both housing and civil engineering. These measures help create a stable pipeline of opportunities and encourage sustainable growth within the industry.
New homes take shape on a UK construction site, with timber frames and scaffolding rising at dawn.
What are firms asking about the construction forecast?
Contractors, suppliers and installers want simple answers about how the Glenigan forecast affects their workload. Many are looking for clarity on project timing, housing activity, civil engineering demand and public sector work. This section gives short answers that explain the main points in plain terms.
How fast will the market improve?
The forecast points to steady, not rapid, improvement. Most activity grows through 2025 and strengthens in 2026.
Are labour shortages still a problem?
Yes. This is one of the biggest risks. Many roles remain difficult to fill.
Will public budgets support growth?
Yes, but mainly from mid-2025 onwards, once reviews and allocations move forward.
Does civil engineering offer real stability?
Yes. It is one of the strongest parts of the forecast.
Ready to grow your visibility in the UK construction sector?
If you want steady growth, better leads, and stronger results across the construction, glazing and building products markets, our team at Purplex can help. We support businesses with SEO, PR, content, social media and full multi-channel campaigns that build trust and drive real enquiries.
Talk to us today via our contact page, call us on 01934 808132, or email grow@purplexmarketing.com.
You might also like to read
If you found this analysis useful, these articles offer more insight into construction marketing, sector trends and practical steps to grow your business.
- Proven marketing strategies for your construction company — A clear guide on how construction firms can grow demand, strengthen their brand, and attract better clients.
- Construction marketing SEO — Practical advice on using SEO to reach more trade buyers, installers and developers.
- UK construction market overview — A sector snapshot showing how market conditions have shifted and where new opportunities are forming.
- Developing marketing specialists for the construction sector — How specialist skills support better performance in a fast-changing industry.
About the Author – Martyn East
I’m Martyn East, an SEO Executive at Purplex. I work with businesses in construction, home improvement and building products to grow their visibility with clear, practical SEO strategies. My focus is simple: fix barriers, drive organic growth, and support your long-term marketing goals.
Connect with me on LinkedIn or read more of my content here: Articles by Martyn East.
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