At a Glance
ONS data shows UK construction output edging up in early 2026, but new orders dropped sharply in Q1, especially in private commercial and infrastructure. (Source: ONS)
Forward-looking analysis points to 2.8%–4.5% construction growth in 2026, largely driven by major infrastructure programmes such as Lower Thames Crossing, HS2 and Sizewell C. (Source: Roofers Coffee Shop)
Government’s latest Grenfell progress report confirms full implementation of inquiry recommendations will extend to end-2029, alongside a new Building Safety Levy from October 2026. (Source: GOV.UK)
A new UK private fusion consortium has launched with major consultants and technology firms, underlining the sector’s role in next-generation clean power. (Source: AECOM)
Climate advisers warn that overheating, flooding and water stress require urgent adaptation measures, with implications for design and asset resilience. (Source: PBC Today)
Today’s update: the data is signalling a two-speed market—near-term softness in orders and tight finance set against expectations of stronger growth from big-ticket infrastructure and energy schemes. At the same time, building safety reforms and climate adaptation demands are reshaping risk and compliance for developers and contractors. Here’s what you need to know to stay ahead today.
Ongoing Stories
Following earlier coverage of pipeline fragility and skills pressures, new 2026 forecasts still expect construction growth but emphasise that workforce shortages could derail delivery of major programmes such as Lower Thames Crossing, HS2 and Sizewell C. (Sources: Project Plant, Roofers Coffee Shop)
Returning to the theme of planning, safety and central intervention, the Grenfell progress report and Building Safety Levy timetable add a new layer of cost and compliance alongside the Planning and Infrastructure Bill changes highlighted earlier this week. (Sources: GOV.UK, Mayer Brown)
Today’s ONS release continues our recent focus on delivery risk and capacity, confirming modest output growth but a 10.5% fall in new orders—reinforcing concerns over how quickly the £530bn-plus pipeline can convert into site activity. (Sources: ONS, Project Plant)
Top 5 Headlines
🏗️ UK construction tipped for 2.8%–4.5% growth in 2026, but labour remains the weak link
New market analysis suggests the UK construction sector could grow between 2.8% and 4.5% in 2026, with infrastructure schemes such as the £10.2bn Lower Thames Crossing, HS2, Sizewell C and major highways and rail projects providing most of the momentum. However, workforce shortages are described as a “critical risk” to achieving this uplift, reinforcing earlier warnings about skills gaps and retirements. For developers and contractors, the opportunity pipeline is clear, but securing labour and specialist skills will be central to bid strategy, programming and pricing. (Source: Roofers Coffee Shop)
🏛️ Grenfell reforms set longer runway, new levy from October 2026
Government’s May 2026 progress report on the Grenfell Tower Inquiry confirms that full implementation of recommendations is now expected by the end of 2029. A consultation is open until 28 May on how higher-risk building work is categorised, while a new Building Safety Levy will apply from 1 October 2026 to most new residential developments of 10 or more dwellings. Returning today as a live policy strand, these measures will shape viability, design and procurement strategies across the residential high-rise and complex mixed-use market over the rest of the decade. (Source: GOV.UK)
💰 ONS: output edges up but new orders fall 10.5% in Q1 2026
Latest ONS data show construction output rising 1.5% month-on-month in March 2026, extending modest gains seen earlier in the year. However, new construction orders were down 10.5% in Q1 2026 versus Q4 2025, with pronounced weakness in private commercial and infrastructure new work, and output prices up 0.8% year-on-year. Financing costs are easing—average loan rates to private non-financial firms have fallen from 7.26% in 2024 to 5.66% by February 2026—but remain a constraint, meaning recovery will depend on cheaper finance, smoother planning and a robust pipeline of committed schemes. (Source: ONS)
🌱 UK Infinity Fusion Consortium launches to pursue first private fusion plant
AECOM, Type One Energy and Tokamak Energy have formed the UK Infinity Fusion Consortium to develop what they describe as the UK’s first private-sector fusion power plant. The partnership brings together engineering consultancy and advanced fusion technology players, signalling growing private capital interest in long-term clean baseload options. For the built environment, fusion development could, over time, generate complex new programmes spanning nuclear-grade civils, grid reinforcement and specialist supply chains. (Source: AECOM)
🌱 Climate Change Committee presses for urgent adaptation on overheating, flood and water risk
The Climate Change Committee is calling for “drastic” change in how the UK prepares for a hotter, wetter and more water-stressed climate, highlighting overheating in buildings, flood risk and water supply resilience as priority areas. It warns that current adaptation measures are lagging behind the pace of climate impacts, with implications for housing, infrastructure and public assets. This ratchets up expectations that future projects will need stronger climate-resilience standards, influencing design briefs, materials choices and lifecycle costings. (Source: PBC Today)
Also in the News
🚆 The Ministry of Justice’s HMP Millsike, the UK’s first all-electric prison, has secured the Infrastructure Award in the Government Project Delivery Awards 2026, spotlighting low-carbon public estate delivery. (Source: Government Project Delivery Awards)
🚆 The British Construction and Infrastructure Awards 2026 entry deadline has been extended to 29 May, with RICS UK Awards and CIHT Infrastructure Awards also underway, offering multiple platforms to showcase projects and teams. (Source: BCIA)
🏗️ Property and planning commentators note that ongoing reforms to planning and housing delivery, alongside the forthcoming Building Safety Levy, are adding further pressure to development viability assessments. (Source: Propertymark)
🌱 Analysis from Ember indicates that growth in UK clean power deployment is steadily reducing the influence of gas prices on electricity costs, with implications for long-term energy-cost assumptions in project business cases. (Source: Ember)
💰 Market advisers stress that while financing costs are easing, capital remains tight, making risk allocation, planning certainty and clear pipelines critical for unlocking private investment into construction. (Source: Entrepreneurs Hub)
The Daily Build is written for people shaping the UK’s construction and infrastructure pipeline, from boardrooms to site offices. If this briefing helps your planning or risk discussions, consider forwarding it to colleagues ahead of your next project review.