At a Glance
UK construction activity remained in contraction in March, with a 15th consecutive month below the 50 PMI threshold and residential work the weakest performer. (Source: S&P Global, Glenigan, Bricks & Bytes)
Cost inflation in UK construction has spiked at its fastest rate in nearly three decades, driven by fuel, transport and materials pressures linked to Middle East tensions. (Source: S&P Global)
The updated National Infrastructure Pipeline now sets out 734 projects worth £718bn, with energy schemes accounting for more than half of planned investment. (Source: UK Government News Releases, Project Delivery UK)
Government has announced fresh support to shield businesses from high energy costs as renewables push past 50% of UK power generation. (Source: UK Government Energy Statistics & News, The Sustainability Grid)
CIS reforms, the forthcoming Building Safety Levy and wider regulatory shifts are set to reshape compliance, tax and risk for contractors and developers through 2026. (Source: UK construction policy briefings, gov.uk)
Today’s update: market data confirm that UK construction is facing a prolonged demand squeeze in housing just as major public infrastructure and energy investment is being scaled up. At the same time, a dense wave of regulatory and fiscal changes is tightening due diligence, tax and safety obligations across the sector. Here’s what you need to know to stay ahead today.
Ongoing Stories
Following earlier coverage of strains in the UK construction pipeline, new PMI and Glenigan data underline that residential work remains the clear weak spot while infrastructure and commercial pipelines show only modest improvement, sharpening the sector’s reliance on public and energy-led programmes. (Source: S&P Global, Glenigan)
Building on recent planning and regeneration discussions, the latest MHCLG planning updates highlight consultations on major new communities at Tempsford, Leeds South Bank, Manchester Victoria North, Thamesmead and Milton Keynes, alongside City Hall’s £324m fund for stalled housing sites, signalling ongoing efforts to unlock large-scale housing despite market headwinds. (Source: MHCLG Planning Update, London City Hall, Farrer & Co)
Returning to the theme of delivery risk and governance, the refocused Government Major Projects Portfolio and the £718bn National Infrastructure Pipeline now add detailed workforce and regional skills data, reframing earlier pipeline concerns around where capacity will actually be available. (Source: UK Government News Releases, Project Delivery UK)
Continuing the net-zero and energy security narrative, new government measures to shield businesses from energy costs sit alongside data showing renewables at 52.7% of power generation, but El Niño-related grid pressures underline that resilience as well as decarbonisation will drive upcoming investment decisions. (Source: UK Government Energy Statistics & News, The Sustainability Grid)
On the policy front, this week’s implementation of CIS reforms and the countdown to the October Building Safety Levy continue a regulatory arc previously flagged, with today’s detail clarifying that 2026 will bring concurrent changes around safety, tax, AI, insolvency and payments. (Source: UK construction policy briefings, gov.uk)
Top 5 Headlines
⚙️ UK construction contracts for 15th month as costs spike to 30‑year high
UK Construction PMI data for March show a reading of 45.6, signalling contraction for the 15th consecutive month, with residential activity down at 38.2 and new housing orders falling at their fastest pace since November 2025. Input costs recorded the sharpest inflation in nearly three decades, driven by fuel, transport and raw materials linked to Middle East conflict and broader geopolitical tensions. Glenigan’s latest analysis adds that growth is slow to non-existent across most verticals. This matters because pricing risk and workload visibility are diverging, forcing contractors and clients to re-examine contingencies, indexation and appetite for fixed-price commitments. (Source: S&P Global, Glenigan, Bricks & Bytes)
🚆 £718bn National Infrastructure Pipeline sets new benchmark for public and energy investment
The March 2026 National Infrastructure Pipeline sets out 734 projects worth £718bn over the next decade, spanning hospitals, schools, rail, reservoirs and clean energy plants. Energy leads the programme with £365bn of planned investment, supported by enhanced workforce and regional skills demand data to align with industrial strategy. This scale and transparency will shape bidding strategies, regional office footprints and long-term capacity planning across civils, building and specialist supply chains. (Source: UK Government News Releases, Project Delivery UK)
🏗️ Planning focus shifts to large new communities and unblocking stalled housing
The latest MHCLG planning update outlines proposals for major new communities at Tempsford, Leeds South Bank, Manchester Victoria North, Thamesmead, Milton Keynes and other locations, with consultation open until 18 May 2026. In London, City Hall has launched a £324m Developer Investment Fund aimed at restarting stalled housing sites, while the Building Safety Levy on new residential schemes is scheduled to begin on 1 October 2026 to support remediation. For developers and investors, the combination of strategic growth zones, targeted liquidity and new levies will recalibrate viability and phasing decisions on large mixed-use and residential-led schemes. (Source: MHCLG Planning Update, Farrer & Co, London City Hall)
🌱 Renewables surpass half of UK power as government moves to cushion energy‑exposed businesses
Government data show renewables delivering 52.7% of UK electricity generation in March, with wind and solar output substantially higher and fossil-fuel generation in decline. A new plan announced on 13 April introduces measures to shield businesses from rising energy costs, following the 1 April reduction in the household price cap, while El Niño conditions are flagged as a risk to grid stability. This trajectory strengthens the case for grid, storage and flexibility investments and will influence energy procurement strategies on major estates and industrial developments. (Source: UK Government Energy Statistics & News, The Sustainability Grid)
🏛️ CIS reform and Building Safety Levy headline a crowded 2026 regulatory agenda
From 6 April 2026, Construction Industry Scheme reforms expand HMRC’s powers to tackle tax fraud, tighten contractor due diligence requirements and alter reporting obligations across the supply chain. Alongside this, the Building Safety Levy will apply to residential developments in England from 1 October 2026 to fund high-rise remediation, while consultations on construction product safety, planning reform, AI, insolvency and payment practices continue. The cumulative effect is a more complex compliance and cashflow environment, raising the premium on robust onboarding, documentation and contract administration. (Source: UK construction policy briefings, gov.uk consultations)
Also in the news
🌱 The Carbon Budget Growth and Delivery Plan is being used to integrate climate and industrial policy, linking net-zero targets to sectoral growth and infrastructure priorities. (Source: UK Government Energy Statistics & News, The Sustainability Grid)
🏗️ Government’s refocused Government Major Projects Portfolio has cut the number of centrally overseen projects from over 200 to around 80 to improve delivery oversight and efficiency. (Source: UK Government News Releases, Project Delivery UK)
⚙️ A new UK Innovation Report finds strong domestic research capabilities but persistent weaknesses in scaling and commercialising technologies such as electronics critical to net-zero delivery. (Source: Cambridge University UK Innovation Report)
⚙️ UK AI chip maker Fractile has announced a £100m investment in a new Bristol facility and engineering hires to expand AI chip production, with potential knock-on benefits for digital construction and design tools. (Source: Global Banking & Finance News)
🏛️ Ongoing consultations on construction product safety and planning reform are progressing in parallel with changes to AI, insolvency and payment rules, signalling further regulatory tightening ahead for project sponsors and contractors. (Source: UK construction policy briefings, gov.uk consultations)
The Daily Build is written for people steering the UK’s construction and infrastructure pipeline. If this briefing is useful, consider forwarding it to colleagues before your next bid, investment or board discussion.
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