Overall construction output has fallen for the second consecutive month despite a small increase in new work, according to the Office for National Statistics (ONS).

The government statistics agency estimated a 0.8 per cent fall for May, following a revised 0.1 per cent drop the month before.

It was also down 1.8 per cent compared with May 2025, the ONS figures showed.

Output rose by 1.4 per cent in March, after ticking up by 0.7 per cent and 0.5 per cent in January and February respectively.

Repair and maintenance (R&M) was the main contributor to the latest monthly decrease with a 2.1 per cent fall, compared to a 0.6 per cent increase in April.

Within the R&M category, private housing experienced the steepest fall in May, at 5 per cent.

In contrast, public housing R&M rose 3.9 per cent compared to April.

Among the construction subsectors monitored by the ONS, new work in private housing increased by 2.3 per cent and overall new housing rose by 1.9 per cent.

Overall new work rose by 0.2 per cent in May.

Meanwhile, the ONS estimated that total construction output grew by 1.6 per cent in the three months to 31 May compared with the previous three-month period.

This marked the third consecutive increase in the three-monthly series, it added.

Growth in the latest period was driven by R&M and new work, with output increases of 1.1 per cent and 2.1 per cent respectively.

At the sector level, seven out of the nine sectors grew in the three months to May 2026. The main positive contributor to the increase was non-housing R&M, which grew by 3 per cent.

Terry Woodley, managing director of development finance at banking firm Shawbrook, said the latest monthly output figures showed that the construction industry “continues to face a difficult balancing act”.

He added: “Higher costs, skills shortages and planning delays are still weighing on activity, making it difficult for developers to maintain momentum.”

Economic and political uncertainty “are continuing to weigh on investment decisions across the [construction] sector”, said Jo Streeten, managing director for buildings and places at Aecom.

She described a “two-speed construction market, where long-term infrastructure continues to provide resilience while many private developments remain under pressure from financing costs and economic uncertainty”.

Clive Docwra, managing director of property and construction consultancy McBains, pointed to uncertainty over “what Burnhamism will mean for the construction sector”, given the need to fund prime minister-in-waiting Andy Burnham’s promises to build more council houses.

“Furthermore, uncertainty about his wider economic agenda will mean investors may take a cautious approach to new projects over the next few months until the picture becomes clearer,” Docwra added.

Elsewhere, market analyst Glenigan painted a picture of an “embattled” construction sector, with project starts and contract awards slowing in the second quarter (Q2) of the year.

Its latest Glenigan Review, released today (16 July), showed projects starting on site fall by 8 per cent compared with the first three months of 2026.

They were also down by 8 per cent on a year-on-year basis.

Main contract awards plunged by more than two-fifths compared with Q1 and were 6 per cent lower than in Q2 2025, Glenigan added.

“This indicates a distinct lack of investor appetite to get things moving any time soon, hampering progress, particularly in commercial sectors, which posted some of the biggest declines in this type of activity,” it said.

The latest review did offer glimmers of hope, showing a 13 per cent quarter-on-quarter increase in planning approvals.

And civils project starts surged 73 per cent year-on-year with a 16 per cent increase in main contract awards, said Glenigan.

This was driven by road, harbour and port projects, it added, with the South East accounting for £6.2bn-worth of project starts.

Civils activity in the West Midlands and East of England also recorded “exceptional gains”, Glenigan said.