{"id":157172,"date":"2025-11-19T11:29:25","date_gmt":"2025-11-19T11:29:25","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=157172"},"modified":"2025-11-19T11:44:29","modified_gmt":"2025-11-19T11:44:29","slug":"glenigan-autumn-forecast-predicts-uk-construction-to-return-to-growth-in-2026","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/glenigan-autumn-forecast-predicts-uk-construction-to-return-to-growth-in-2026\/157172\/","title":{"rendered":"Glenigan Autumn Forecast predicts UK construction to return to growth in 2026"},"content":{"rendered":"<h2>Glenigan&#8217;s UK Construction Industry Autumn Forecast 2026-2027 shows significant recovery across the sector, with housebuilding activity still predicted to rise by almost a fifth in 2027<\/h2>\n<p>Predominantly focused on underlying starts (&lt;\u00a3100m in value), unless otherwise stated, the<a href=\"https:\/\/www.glenigan.com\/\" target=\"_blank\" rel=\"noopener\"> Glenigan forecast<\/a> contains a comprehensive overview of the future of the construction industry.<\/p>\n<p>At a glance:<\/p>\n<ul>\n<li>Revised figures will see UK construction sector grow 21% over the next two years<\/li>\n<li>Private housebuilding remains on course to grow significantly, with activity still predicted to rise by almost a fifth in 2027<\/li>\n<li>Commercial office starts set to continue their ascent, and increasing consumer confidence unlocks opportunities for industrial, logistics, retail, and hotel &amp; leisure<\/li>\n<li>Spending Review intentions set to be realised post-budget, with activity increases set for 2026 and 2027<\/li>\n<\/ul>\n<p>The key takeaway from the Autumn Forecast, which focuses on the two years 2026-2027, is that, despite the aggressive geopolitical and socioeconomic headwinds which have picked up during Q.3 and Q.4 this year, the sector is still on course for recovery in 2026 and 2027.<\/p>\n<h3>Growth has been re-forecast<\/h3>\n<p>Following a period of international turbulence and domestic uncertainty, 2025 and 2026 figures have been revised down, with the former now in negative numbers (-6%) and the latter adjusted down a couple of percent since the spring (+8%). However, these relatively disappointing results are offset by predictions for 2027, where Glenigan\u2019s Economic Unit foresee a 13% activity boost.<\/p>\n<p>Whilst the industry will be frustrated that a reversal of fortune will not come as quickly as thought back in May\/June 2025, there will be a collective sigh of relief that the negative impact of international conflict, trade wars and policy speculation has not done more damage.<\/p>\n<p>Overall, the UK construction sector has done well to weather what has become a persistent storm, punctuated by aggressive peaks and troughs in activity, and is positioning itself to kickstart activity following<a href=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/industry-expert-discusses-autumn-budget-construction-wishlist\/157080\/\" target=\"_blank\" rel=\"noopener\"> next week\u2019s Budget<\/a>.<\/p>\n<p>Positive signals are making themselves heard within a variety of different quarters, with certain \u2018verticals to watch\u2019 emerging from amongst the present gloom.<\/p>\n<h3>Commercial office work will stay strong into 2026<\/h3>\n<p>The Glenigan Economics Unit foresees a rise in both private and public sector starts, with residential construction returning to positive figures after a blip over the summer and autumn of 2025. Likewise, the golden period experienced within the commercial office space over Q.3 and Q.4 is likely to continue into next year as more refurbishment work comes online.<\/p>\n<p>Equally, as consumer confidence (hopefully) resurges following the Chancellor\u2019s upcoming Budget, we\u2019ll see an uptick in discretionary spending, catalysing a boost for industrial projects as online shopping increases and more logistics and warehouse facilities are required. Hotel &amp; leisure will also likely benefit as improved confidence and a rise in disposable income boosts consumers\u2019 discretionary spending.<\/p>\n<p>In the public space, the Government will be hoping to kickstart a number of capital projects, especially around renewables, as well as deliver on its social housing commitments and promised increases in funding for health and education. More broadly, a renewed commitment to delivering Net Zero across state-owned assets by 2050 will present ample opportunity for contractors and subcontractors to seize on.<\/p>\n<p>Accordingly, Glenigan\u2019s economic director, Allan Wilen says, \u201cAs with any Forecasts, it\u2019s difficult to foresee unpredicted and spontaneous political and economic issues until they suddenly land, often completely changing the situation. The \u2018will they\/won\u2019t they\u2019 attitude that the professional and consumer landscape has taken towards trailed Government policy has done nothing to inspire confidence in the latter part of 2025. This is borne out by the dramatic performance decreases we\u2019ve seen across our own Indexes since the summer, dashing any hopes of recovery by the end of this year.<\/p>\n<p>\u201cHowever, the Chancellor has a real opportunity within this Budget to rebalance the situation and ensure that a kick-start into 2026 is not the false start we witnessed in the Spring of this year. There are some very encouraging signs already across different verticals and it will be up to the industry to take advantage of them and, in some cases, that might mean diversifying to meet more niche demands around low-carbon construction and commercial fit-out or even different building approaches and services; for example, addressing the changing needs of an ageing population. So, whilst we\u2019re experiencing short-term struggles, we\u2019re still confident of a brighter long-term picture.\u201d<\/p>\n<p>Taking a more detailed look at the Forecast\u2026<\/p>\n<h3>Private residential: housing market holds firm<\/h3>\n<p>Following a very positive outlook predicted in June, figures have been reassessed, following a softening in market confidence and a drop in property transactions during Q.2\/Q.3 2025.<\/p>\n<p>The initial rise in private housing starts during the first four months of 2025 proved short-lived. Following April\u2019s stamp duty increase, starts fell back during the second half of the year. Apartment projects were especially weak as slow building safety regulator (BSR) approval delayed project starts.<\/p>\n<p>However, despite these setbacks, housing market activity has been broadly stable during the second half of the year. This has been supported by rising household incomes, with the number of mortgage approvals for house purchases close to their pre-pandemic average.<\/p>\n<p>The outlook remains positive. Stronger economic growth is expected to lift housing market activity over the next two years. Rising real incomes and further interest rate cuts are expected to lift house-buyers&#8217; confidence from 2026. Furthermore, supply-side restraints are also expected to ease as the BSR reduces the backlog of projects awaiting approval, and planning reforms are expected to help release additional sites for development, supporting sector growth during the latter stages of the forecast.<\/p>\n<h3>Private non-residential verticals: A wealth of opportunity awaits<\/h3>\n<p>Renewed growth is anticipated in 2026 and 2027, despite many verticals slipping back during 2025.<\/p>\n<p>Whilst the industrial sector suffered from a drop in manufacturing projects, this was offset by a spurt in warehousing starts. This growth neatly anticipates higher consumer spending and sustainable increases for this type of project. This, in turn, will likely see further demand for logistics and light industrial space from online retailers and third-party carriers.<\/p>\n<p>However, bricks and mortar retail will be slower to recover as operators face increased cost pressures from NI increases and the rise in the minimum wage. An overhang of empty retail premises is also deterring investment in new premises. Although, in the spirit of adapting to survive, this situation may also prompt landlords to refresh and repurpose existing excess retail space. As ever, supermarkets remain a bright spot, with the big discounters, Aldi, and Lidl, set to continue increasing their physical footprint over the Forecast period.<\/p>\n<p>Similar to retail, the hospitality industry\u2019s margins have been squeezed by increased labour costs, limiting the funds available for investment near term. Yet, whilst the growth in hotel &amp; leisure starts has <a href=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/gloomy-outlook-latest-glenigan-index-report\/155792\/\" target=\"_blank\" rel=\"noopener\">slowed over the last 12 months<\/a>, progressive improvement in households\u2019 financial position is set to benefit the vertical through higher consumer discretionary spending. This is expected to lift investors\u2019 confidence and support increased investment in the sector during 2026 and 2027.<\/p>\n<p>Perhaps most encouraging was the office vertical\u2019s return to growth this year. Lower borrowing costs have renewed investor confidence, driving increases in both refurbishment and new build projects. Hybrid working patterns and regulatory changes are reshaping demand for office space, with many firms remodelling existing premises to better support hybrid work and improve environmental performance. Furthermore, rising demand for high-quality, sustainable offices is also expected to create new build opportunities over the next two years.<\/p>\n<h3>Public sector verticals: renewed growth across key areas<\/h3>\n<p>Looking towards the public space, the entire construction industry is awaiting with bated breath to see what the Chancellor will pull out of the hat in the Autumn Budget. After what appears to be a series of false starts, all will be looking for clarity, particularly in areas such as health and education.<\/p>\n<p>However, if the Spending Review is anything to go by, the Government has set out a longer-term rise in capital funding plans that is forecast to support an increase in project starts from mid-2026 onwards.<\/p>\n<p>Although the new government increased capital funding for the school rebuilding programme and further education in 2025\/26, earlier uncertainty appears to have disrupted local authorities\u2019 development plans, leading to a decline in the value of school and college project starts this year. A clearer funding pipeline is expected to boost activity across the sector in 2026 and 2027, with particularly strong growth forecast in further education as the government prioritises vocational training.<\/p>\n<p>While the Chancellor announced increased capital funding for the NHS in 2025\/26, most of this funding has been allocated to non-construction areas such as technology and diagnostic scanners. The Spending Review did, however, outline a more sustained rise in capital funding from next April, which is expected to enable NHS trusts to tackle the repair backlog across their existing estate.<\/p>\n<p>Looking at social housebuilding, additional funding commitments in the Spending Review and greater access to private sector funding is expected to support a strengthening in housing associations\u2019 development pipelines and project starts in 2026 and 2027. That\u2019s not all. A recovery in student accommodation starts is also underway after a halving in activity during 2024, prompting the speculation of a further rise in PBSA projects over the next two years.<\/p>\n<p>Turning to infrastructure, road and rail projects were delayed by the post-election review of government programmes, prompting a dip in starts this year, despite the government providing near-term funding for smaller-scale projects such as road repairs. However, once again, the Spending Review has provided a glimmer of intention, setting out a longer-term framework for increased investment in the road and rail networks that is forecast to support a resurgence in project starts from 2026.<\/p>\n<p>Elsewhere, a progressive rise in water industry activity is forecast to lift utilities starts during 2026 and 2027 as the AMP8 investment programmes gather momentum. Increased investment in renewable generating capacity and grid upgrades are also expected to lift activity over the next couple of years.<\/p>\n<div class=\"mk-custom-module-container\">\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Glenigan&#8217;s UK Construction Industry Autumn Forecast 2026-2027 shows significant recovery across the sector, with housebuilding activity still predicted to rise by almost a fifth in 2027. <\/p>\n","protected":false},"author":25,"featured_media":157173,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[304],"tags":[277,908],"stakeholder_rel_tag":[],"contributor_rel_tag":[],"class_list":{"0":"post-157172","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-planning-construction-news","8":"tag-built-environment","9":"tag-economy"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v26.9) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Glenigan Autumn Forecast predicts UK construction to return to growth in 2026<\/title>\n<meta name=\"description\" content=\"Glenigan&#039;s Autumn Forecast 2026-2027 shows recovery across the sector, with housebuilding activity predicted to rise by almost 20% in 2027\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/glenigan-autumn-forecast-predicts-uk-construction-to-return-to-growth-in-2026\/157172\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Glenigan Autumn Forecast predicts UK construction to return to growth in 2026\" \/>\n<meta property=\"og:description\" content=\"Glenigan&#039;s Autumn Forecast 2026-2027 shows recovery across the sector, with housebuilding activity predicted to rise by almost 20% in 2027\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/glenigan-autumn-forecast-predicts-uk-construction-to-return-to-growth-in-2026\/157172\/\" \/>\n<meta property=\"og:site_name\" content=\"Planning, Building &amp; 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