Construction activity fell by a fifth in the three months to 31 August compared to the same period last year, according to new analysis from Glenigan.<\/p>\n
Its latest\u00a0Construction Index, which tracks the value of construction projects worth less than \u00a3100m, found that project starts fell by 2 per cent in the three months to the end of August compared with the previous three months.<\/p>\n
The fall was smaller than in previous months, Glenigan said, adding that this suggests the downturn may be starting to level off.<\/p>\n
But starts for sub-\u00a3100m projects were still 20 per cent lower than the period from June to August 2025, it added.<\/p>\n
Allan Wilen, economics director at Glenigan, said the industry had \u201ccaught its breath\u201d over the summer, although there was still little sign of a recovery.<\/p>\n
\u201cAfter a rough start to the year, it\u2019s fair to say the sector caught its breath over the summer and, whilst activity levels remain painfully low, they have stabilised,\u201d he said.<\/p>\n
\u201cIt\u2019s a positive sign that the freefall, which began in Q2, has finally ground to a halt; that said, we\u2019re not exactly climbing yet.\u201d<\/p>\n
Housing remains the biggest problem, with residential construction starts down 15 per cent over the three months to August and 36 per cent lower than a year ago.<\/p>\n
Private housing was down 37 per cent on last year, while social housing fell 30 per cent.<\/p>\n
Weak house sales, higher building costs and the incoming building safety levy are making it harder for developers to make some housing schemes stack up financially.<\/p>\n
There could be some help for social housing if the government backs its housebuilding plans with further funding in the Autumn Budget, although it could take time for that money to feed through into construction work.<\/p>\n
Outside housing, there was a more positive picture.<\/p>\n
Non-residential construction starts were up 6 per cent over the three months and 1 per cent higher than a year ago.<\/p>\n
Willen described it as \u201cthe real bright spot\u201d, although he warned there were still concerns over some parts of the market.<\/p>\n