At a glance
UK construction market forecast to reach USD 391bn by 2031, with output growth accelerating from 2.8% in 2026 to 4.2% in 2027.
Housing and infrastructure remain the main engines of growth, but average planning decision times are stuck at around 248 days against a 91-day target.
Middlewich Eastern Bypass moves into main construction, joining HS2 and Lower Thames Crossing as 2026–28 delivery priorities.
Over 70 long-duration energy storage schemes totalling about 26 GW shortlisted, alongside progressing CCS and hydrogen initiatives.
Planning reforms for nationally significant infrastructure passed in late 2025 now move from legislation into implementation on live schemes.
Today’s update: new market data reinforces a cautiously optimistic recovery path for UK construction, led by civils, housing and data-driven commercial schemes, but persistent planning delays continue to blunt that momentum. At the same time, major transport and energy projects are shifting from policy intent to delivery, testing whether late-2025 planning reforms can genuinely speed approvals and build-out. Here’s what you need to know to stay ahead today.
Ongoing Stories
Following earlier coverage of planning and infrastructure reforms, today’s data underlines that late-2025 changes to streamline consents and judicial reviews for nationally significant infrastructure are now a key backdrop to 2026 project delivery, even as average planning decisions still take around 248 days.
Returning to the sector’s delivery risk theme, the latest UK market forecasts show a steady growth path underpinned by housing and infrastructure, but also confirm that realising this pipeline will depend on the skills, productivity and policy constraints highlighted in recent issues.
Building on previous transport coverage, HS2, Lower Thames Crossing and other megaprojects are now framed as moving decisively into active construction phases in 2026, turning long-trailed ambitions into multi-year on-site activity.
Top 5 headlines
💰 UK construction market tipped to grow to USD 391bn by 2031
Fresh market analysis values the UK construction sector at USD 325.33bn in 2026, rising to USD 391.45bn by 2031 on a 3.77% CAGR. Output growth is projected at 2.8% in 2026, accelerating to 4.2% in 2027, with a recovery driven by civils (+17%), office and data centres (+13%), industrial (+12%) and a 6% uplift in housing. Residential accounts for 38.1% of the market and new build for 55.1%, underscoring the importance of greenfield and regeneration pipelines. This matters because it reinforces a medium-term growth story for contractors and investors, even as near-term delivery risks remain high. (Source: Mordor Intelligence, Glenigan, Ambrey Baker, ONS)
🏗️ Planning delays still triple government target despite reform push
While major planning and infrastructure reforms passed in December 2025 aim to streamline approvals and judicial reviews for nationally significant schemes, current data shows average planning decisions taking around 248 days versus the 91-day target. Local processes remain under pressure, illustrated by routine public notices such as North East Lincolnshire Council’s latest residential and signage applications and ongoing national consultations on design guides and local plans. For developers and funders, this gap between policy intent and on-the-ground performance remains a critical programme and cost risk. (Source: North East Lincolnshire Council, Planning Portal, HM Government, Homebuilding.co.uk)
🚆 Middlewich Eastern Bypass secures main contractor and start date
Cheshire East Council has confirmed appointment of the main construction-phase contractor for the £53.8m Middlewich Eastern Bypass, with work to start in spring 2026 and completion targeted for spring 2028. The scheme will create a new route around Middlewich to ease congestion and support housing and employment growth in the area. This represents another mid-scale regional highways job moving from design into delivery, offering opportunities for local supply chains and signalling that pipeline schemes are now being locked into firm programmes. (Source: Cheshire East Council)
🚆 HS2 and other megaprojects shift into intensive 2026 delivery phase
HS2 has completed major tunnelling between Old Oak Common and Birmingham, with 2026 works set to focus on final tunnelling towards Euston and continued above-ground construction. Other large schemes including the Lower Thames Crossing, the Transpennine Route Upgrade and the Eastern Green Link HVDC cable are also highlighted as entering key build phases that will strengthen the national transport and electricity grids. This concentration of activity in the mid-2020s will drive sustained demand for civils, M&E and systems integration, but will also intensify competition for labour and specialist plant. (Source: HS2 Ltd, The Highfield Company, Cheshire East Council)
🌱 26 GW of long-duration storage shortlisted as net-zero infrastructure scales up
More than 70 long-duration energy storage projects, totalling around 26 GW of capacity, have been shortlisted in the UK, intended to support grid reliability as renewables penetration rises. In parallel, Harbour Energy is advancing its carbon capture portfolio, including the Greensand Future CCS project in Denmark, which is targeting commercial operations by end-2026, while hydrogen continues to be identified as a priority transition vector. The build-out of this clean energy infrastructure will create new opportunities for civils, process engineering and grid contractors, but also demands careful integration with existing networks and planning regimes. (Source: Bryt Energy, Harbour Energy, Imperial College London, Energy UK)
Also in the news
🏗️ National consultations continue on Design and Placemaking guidance and the Greater Cambridge Local Plan for 50,000 homes to 2045, shaping future housing-led development frameworks. (Source: Planning Portal)
🏗️ North East Lincolnshire Council has published routine planning notices for small-scale residential and signage schemes, with public comments invited by 15 February, highlighting ongoing pipeline at the local authority level. (Source: North East Lincolnshire Council)
🌱 New modelling from Imperial College London indicates that a rapid fossil fuel phase-out requires substantial upfront energy inputs to build low-carbon infrastructure, adding nuance to net-zero deployment timelines. (Source: Imperial College London)
🌱 Harbour Energy’s January 2026 trading and operations update reiterates progress on its CCS portfolio, confirming end-2026 as a key milestone for Greensand Future’s commercial start in Denmark. (Source: Harbour Energy)
💰 Industry commentary from Bryt Energy and others stresses hydrogen’s role in the UK transition mix, with emerging but as-yet-unspecified project pipelines beginning to shape future industrial demand. (Source: Bryt Energy, Energy UK)
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