Research by construction industry insight and intelligence experts, Glenigan, has found that, despite a modest uptick in underlying performance, the country saw a slump in major project activity.
The August edition of the Construction Review from Glenigan, powered by Hubexo, reported stalling recovery, with overall project starts declining by 20% compared by the previous three months and by 17% year-on-year.
Poor project start results were reflected in both main contract awards and detailed planning approvals, which dramatically fell 26% and 55% against the preceding three months, respectively. The former also dropped 39% when measured against 2024, and likewise, the latter dived 36%. Once again, this is all attributable to major project activity, contributing to a potentially far drier pipeline during Q3 compared to the first half of the year.
Glenigan’s economic director, Allan Wilen, said: “The market remains mercurial, frustrating industry effort towards wholesale recovery. Whilst many will find solace in opportunity within underlying projects, the major project work remains worryingly thin, both on the ground and in the development pipeline. The government has made some big promises in its recent Spending Review, and rapid progress is needed to bring forward the projects that will deliver this investment, to boost economic growth and create jobs. From a business perspective, the interest rate cuts will also help ease financing of construction projects; however, their effects on a relatively weak pipeline remain to be seen.”
Despite disappointed major project performance, underlying construction starts (less than £100million in value) remained resilient throughout the period, achieving a steady growth of 9% both quarter-on-quarter and year-on-year.
The residential sector saw the best performance during the period, with underlying work starting on-site increasing by 10% against the previous three months and 25% compared to the previous year. Specifically, private housing starts rose 24% quarter-on-quarter and stood 40% higher than 2024 levels, underlining the sector’s robust recovery momentum.
Although there was mixed performance across certain segments, the market’s fundamental strength remained evident through selective growth areas. Underlying office developments were particularly strong, with starts increasing 39% in the three months to July and standing 64% up year-on-year. This includes significant projects such as ‘The Republic’ office development in Manchester, valued at £98.8million.
