At a Glance:
Q2 construction output edges up 0.3% as infrastructure work offsets weakness in building.
New orders fall 11.8% in Q2 and project starts remain 29% down year-on-year, signalling a thinner pipeline.
Government confirms 43 grid transmission projects under a new pylon compensation scheme to unlock delivery.
HS2 civils contracts are rephased with main works between Old Oak Common and Birmingham now targeted to 2029.
Housing and local development continue in pockets, with a 593-home village approved in North Lincolnshire.
Today’s update: official data and market indices point to a construction sector that is growing only marginally, with infrastructure and utilities now clearly carrying the workload as building output and new orders sag. At the same time, government is leaning harder on grid and rail investment to drive activity, while local planning continues to drip-feed housing schemes. Here’s what you need to know to stay ahead today.
Ongoing Stories
Following earlier coverage of UK infrastructure delivery risks, today’s ONS and Glenigan figures show infrastructure new work rising 1.9% in Q2 and civil engineering starts up 34% quarter-on-quarter, underlining that public capital investment is now the main engine of sector growth. (Sources: ONS, Glenigan)
Returning to the theme of grid expansion and planning reform, the government’s confirmation of 43 transmission projects under a new pylon bill-discount scheme adds specific schemes and a household compensation mechanism to the broader policy push on energy infrastructure. (Source: UK Government)
Top 5 Headlines
⚙️ Q2 2026 construction output inches up 0.3% as infrastructure leads
Official ONS data shows total UK construction output grew by 0.3% in Q2 2026 compared with Q1, with infrastructure new work up 1.9% while building work remained weak. The figures confirm only modest expansion, driven largely by civils and utilities. For contractors and clients, this points to infrastructure frameworks and public works as the most reliable sources of near-term volume. (Source: ONS)
💰 New construction orders down 11.8% in Q2, raising pipeline concerns
ONS data shows new construction orders fell sharply by 11.8% in Q2 2026, despite the uptick in output over the same period. The decline signals a weakening pipeline that could feed through to reduced activity later in 2026 and 2027 if not offset by additional public or private commitments. Developers, contractors and supply chains may need to plan for increased competition on fewer opportunities and tighter margins. (Source: ONS)
⚙️ Glenigan: project starts 29% down year-on-year but civils rebound
The August 2026 Glenigan Construction Index reports project starts on site are still 29% lower year-on-year, highlighting subdued overall activity. However, civil engineering starts are up 34% quarter-on-quarter, supported by schemes such as the Culham River Crossing and Dumfries flood protection. The split reinforces a two-speed market in which firms aligned to infrastructure and flood resilience see opportunity while general building pipelines remain under pressure. (Source: Glenigan)
🚆 HS2 civils contracts rephased with main works to 2029
Contracts for HS2 civil engineering between Old Oak Common and Birmingham Curzon Street have been revised, with main civils now targeted for completion by 2029 to allow subsequent rail systems installation. Alongside this, new rail access projects such as the Okehampton Interchange are progressing towards service commencement. The rephasing provides greater schedule clarity for Tier 1s and supply chains, while confirming HS2 as a long-running anchor for civils capacity planning. (Source: UK Railway News)
🚆 Government confirms 43 grid transmission projects with local bill discounts
The government has announced 43 electricity transmission projects will benefit from a new compensation scheme offering bill discounts to households living near new pylons, with payments due to start next year. The policy is designed to ease community concerns and accelerate expansion of the power grid needed for net-zero and electrification. For energy and civils contractors, the programme sets out a clearer forward workload and a framework for managing local consent around major grid corridors. (Source: UK Government)
Also in the news
⚙️ The UK Construction PMI for July 2026 indicates the sector’s downturn is easing, with sentiment improving and builders more optimistic on future activity even though current workloads remain weak. (Source: Reuters)
🏛️ Industry commentary on the latest Glenigan data suggests that public capital investment from the recent Spending Review is beginning to flow into utilities and infrastructure projects, aligning with the observed rise in civil engineering starts. (Source: Industry commentary on Glenigan data)
💰 Construction output prices were 1.9% higher year-on-year to June 2026, reflecting ongoing but moderate cost pressures from materials and labour. (Source: ONS)
🏗️ North Lincolnshire Council has approved plans for a 593-home Ashmere Village development, underlining that local plan-led housing delivery is continuing despite wider market softness. (Source: BBC News)
🚆 New rail access schemes, including the Okehampton Interchange commencing service, point to continued incremental investment in regional connectivity alongside flagship projects like HS2. (Source: UK Railway News)
The Daily Build is written for people shaping the UK’s construction and infrastructure pipeline, from boardrooms to site offices. If this briefing is useful, consider forwarding it to colleagues who are planning bids, budgets or capacity for the next quarter.