At a Glance
UK construction is forecast to grow 3.5–4.5% in 2026, led by infrastructure, water, energy and public works, despite recent falls in new orders.
ONS data shows construction output edged up 0.4% in Q1 2026, with repair and maintenance up 3.4% but new work down 1.9% and orders dropping 10.5%.
Government is preparing a revised National Planning Policy Framework and £100m in planning capacity funding as part of wider housing and infrastructure ambitions.
An updated national infrastructure pipeline now totals over 700 projects and more than £700bn in planned investment across social and economic infrastructure.
Energy and climate policy shifts include Ofgem’s latest price cap, higher compensation thresholds for support schemes, and mandatory Biodiversity Net Gain for NSIPs.
Today’s update: market data points to modest near‑term construction growth and a strong long‑term pipeline, even as new orders soften and late payments pressure SMEs. At the same time, planning reform, housing programmes and evolving energy and nature regulations are reshaping the risk–reward profile of projects moving into procurement. Here’s what you need to know to stay ahead today.
Ongoing Stories
Following earlier coverage of the UK’s £530bn construction and infrastructure pipeline, fresh analysis now pegs the broader infrastructure pipeline at £718bn across 734 projects over the next decade, reinforcing the scale but also the delivery challenge ahead. (Source: Project Delivery Gov)
Building on recent focus on planning reform, the government is moving towards publishing a revised NPPF this summer, backed by £100m for local authority planning capacity and a suite of long‑term housing programmes. (Source: Gov.uk)
Returning to the theme of renters’ rights and residential regulation flagged last week, implementation of the Residential Rented Accommodations Act continued in May 2026 with new tenancy reforms now bedding into the market. (Source: Osborne Clarke)
Top 5 Headlines
💰 UK construction set for 3.5–4.5% growth in 2026 despite order slowdown
The UK construction sector is projected to grow by around 3.5–4.5% in 2026, with infrastructure, water, energy and public works driving the expansion. This comes against a backdrop of significant workforce pressures and a long‑term infrastructure pipeline underpinning demand. For contractors and suppliers, this suggests a firmer 2026 workload mix skewed towards public and regulated sectors even as private demand stays patchy. (Source: Roofers Coffee Shop)
💰 ONS: construction output edges up, but Q1 new orders fall 10.5%
Official ONS figures show UK construction output rose 1.5% in March 2026 and 0.4% over Q1, with repair and maintenance up 3.4% but new work down 1.9%. New orders declined 10.5% in Q1 2026, driven mainly by falls in private commercial and infrastructure orders. The data points to a near‑term cooling in pipeline conversion, reinforcing the need for firms to manage bid selectivity and capacity as public infrastructure work ramps up later in the decade. (Source: ONS)
🚆 UK infrastructure pipeline now 734 projects worth £718bn
Government’s updated infrastructure pipeline lists 734 projects totalling £718bn over the next 10 years, spanning hospitals, schools, railways, reservoirs and clean energy plants. Alongside this, wider plans include £725bn of infrastructure investment, incorporating 1.5 million homes, 35 hospitals and 20,000 prison places. This scale of committed and planned work underscores long‑run visibility for civils, M&E and professional services, but also heightens scrutiny on delivery models, skills and funding. (Source: Project Delivery Gov, IIGCC)
🏗️ Planning reform, £39bn affordable housing and standardised design push
The government is preparing a revised National Planning Policy Framework for publication this summer, supported by £100m to boost local planning authority capacity and expand local plan coverage. Housing programmes include a £39bn Social and Affordable Homes Programme and a £16bn National Housing Bank aimed at delivering 130,000 homes via a New Homes Accelerator, plus work with 23 local authorities to complete standardised house designs by end‑2026. For developers and registered providers, this signals sustained central backing for volume affordable delivery, with standardisation and faster planning likely to shape design and procurement decisions. (Source: Gov.uk)
🌱 Energy security, Ofgem price cap and new compensation rules reshape risk
A 2 June 2026 update from the Department for Energy Security and Net Zero links energy security, climate action and job growth, while Ofgem’s latest price cap for April–June 2026 will cut average household bills by £117 (7%) versus the previous period despite rising RIIO‑3 network costs. From April 2026, compensation for certain electricity support payments has been increased from 60% to 90% with extended eligibility windows, and from May 2026 Biodiversity Net Gain became mandatory for Nationally Significant Infrastructure Projects. Energy clients and major project sponsors now face a tighter but clearer regulatory framework, with new obligations around biodiversity offsetting and consumer protection feeding directly into scheme economics and consents. (Sources: Ofgem, DESNZ, Osborne Clarke, IIGCC)
Also in the news
⚙️ Late payments remain a significant drag on construction SMEs, with an estimated £26bn tied up in overdue invoices, pressuring cashflow just as firms gear up for forecast 2026 growth. (Source: Roofers Coffee Shop)
🚆 Work is ramping up on flagship schemes including the £10.2bn Lower Thames Crossing, with construction underway since March 2026 and tunnelling due to start in 2028, plus the TransPennine Route Upgrade, Eastern Green Link 1, East West Rail’s Bletchley–Cambridge section and Gatwick expansion. (Source: Glenigan)
🏛️ Implementation of the Residential Rented Accommodations Act continued in May 2026 with new tenancy reforms, adding another compliance layer for residential investors and build‑to‑rent operators. (Source: Osborne Clarke)
🌱 The UK government is prioritising carbon budget measures across transport, buildings and industry, aligning infrastructure and building programmes more closely with climate and nature objectives. (Source: IIGCC)
🌱 Mandatory Biodiversity Net Gain for NSIPs is already increasing demand for biodiversity units, influencing land strategies and early‑stage design for major energy and transport projects. (Source: IIGCC)
The Daily Build is written for people shaping the UK’s construction and infrastructure pipeline. If this briefing is useful for your next board, bid or investment meeting, consider forwarding it to your wider team.