At a glance

UK construction is forecast to grow by around 3.5%–4.5% in 2026, led by infrastructure and energy schemes despite ongoing cost and margin pressures. (Sources: Rooferscoffeeshop, Pinsent Masons)
ONS data confirms construction output edged up 0.4% in Q1 2026, but project starts in March were down 18% year-on-year, with residential and civils hit hardest. (Source: ONS)
Infrastructure, energy transition and water-sector capital programmes are increasingly central to workloads, offsetting weaker private housing and mixed commercial demand. (Sources: TMHCC, Arcadis)
Government’s 10 Year Infrastructure Strategy, with at least £725bn of planned capital investment, remains the main policy anchor amid a quiet period for new announcements. (Source: GOV.UK)
Industry awards and design competitions are ramping up, with RICS UK Awards shortlists and multiple national awards deadlines landing on 29 May, spotlighting best practice in delivery and design. (Source: RICS)
Today’s update: data released in late May shows a sector edging back into growth but wrestling with weak project starts and intense cost inflation, even as infrastructure and energy workloads remain robust. Policy noise is low, so the 10 Year Infrastructure Strategy and building safety reforms are providing the main framework for decisions. Here’s what you need to know to stay ahead today.

Ongoing Stories

Following earlier coverage this week of long-term infrastructure delivery risks, today’s material underlines that the government’s £725bn 10 Year Infrastructure Strategy is now the central backdrop for investment decisions, with stability of capital budgets a recurring concern. (Source: GOV.UK)
Returning to the theme of skills and governance raised in recent editions, the government’s building safety reforms now include plans for a Chief Construction Adviser and a single building safety regulator, signalling more coordinated oversight for higher-risk projects. (Source: GOV.UK)
Top 5 headlines

💰 UK construction forecasts 3.5%–4.5% growth in 2026 despite headwinds
Industry outlooks published around 28–29 May point to cautious optimism, with overall UK construction output projected to grow between 3.5% and 4.5% in 2026, driven by infrastructure and energy transition schemes such as onshore wind, battery storage, water capital works and small modular reactors. Private housing is slowly recovering but continues to be constrained by affordability and planning, while commercial work is patchy outside buoyant segments like data centres and logistics. Cost inflation and tight margins are expected to persist, with firms under pressure to improve productivity and embrace digital and AI-enabled delivery. This matters because capacity and capital are likely to migrate towards infrastructure and energy, reshaping the opportunity set for contractors and consultants. (Sources: Rooferscoffeeshop, Pinsent Masons)

🚆 Infrastructure and energy lead as project starts slump 18% in March
Latest ONS and market reports show total construction output rose 0.4% in Q1 2026 versus Q4 2025, but project starts in March 2026 were 18% lower year-on-year, with residential and civil engineering starts reportedly down about 30%. Infrastructure is forecast to outperform, with output growth of 2.4%–3.9% this year, and sentiment in infrastructure, energy and water remaining notably more positive than in private housing and general commercial. Building material and input prices remain elevated, with a PMI input price index reading of 70.5 in March signalling strong cost pressure. The divergence suggests that pipelines tied to public and regulated infrastructure will be more resilient than discretionary private schemes in the near term. (Sources: ONS, TMHCC, Arcadis)

🏛️ £725bn 10 Year Infrastructure Strategy remains anchor amid policy quiet
With no major new government construction or infrastructure announcements dated 28–29 May, attention remains fixed on the 10 Year Infrastructure Strategy launched in June 2025, committing at least £725bn of public capital investment. The framework emphasises stable long-term budgets, asset management, housing, transport, power and water infrastructure, alongside building safety reforms as core priorities. Industry commentary highlights that delivery will hinge on consistent funding, planning reform and clearer governance across departments and regulators. For investors and contractors, this is the key policy reference point for judging pipeline certainty and regional risk. (Sources: GOV.UK, ICE)

🏗️ Building safety agenda steps up with new adviser and single regulator plan
The government’s February 2026 annual report on its response to the Grenfell Tower Inquiry confirms ongoing work to create a Chief Construction Adviser role and a single building safety regulator. These plans sit alongside refinement of the post-Grenfell regulatory regime and are intended to consolidate oversight of safety standards and industry competence. The direction of travel points to tighter, more coordinated scrutiny of design, construction and asset management across higher-risk buildings. Dutyholders should plan for more integrated regulatory engagement and potential changes to processes and accountability lines on complex projects. (Source: GOV.UK)

⚙️ Awards season highlights best practice as sector chases productivity gains
RICS has announced regional shortlists for its UK Awards 2026, covering public sector, heritage, refurbishment, community benefit and commercial developments across the country. Multiple industry awards – including the Landscape Institute Awards, Brick Awards and Offsite Construction Awards – hit entry deadlines on 29 May, while submissions remain open for the 2026 Greater Cambridge Design and Construction Awards. Alongside earlier Digital Construction Awards results, these programmes are foregrounding innovation in digital delivery, sustainability and offsite methods. For project teams, shortlisting and wins are becoming a useful signal of capability in a market where clients are increasingly focused on performance, whole-life value and net zero. (Sources: RICS, Greater Cambridge Planning)

Also in the news

🏗️ Market commentators note that despite modest Q1 growth, the 2.0% fall in output over the three months to January 2026 and weak new work underline a fragile recovery path. (Source: ONS)
⚙️ Cost consultants report continued inflation in building costs and tender prices through early 2026, keeping pressure on contractor margins and risk pricing. (Source: Arcadis)
🏗️ The Digital Construction Awards 2026, held earlier this year, are being cited in industry commentary as evidence of growing uptake of AI-enabled tools on major projects. (Source: ConstructionMagUK)
⚙️ Constructing Excellence content dated 28 May focuses on innovation and events rather than new contract wins, suggesting a period of consolidation rather than major procurement announcements. (Source: ConstructionMagUK)
💰 Recent corporate news includes Keltbray appointing a new CEO from within its existing leadership, reflecting a trend towards internal succession planning among major contractors. (Source: ConstructionMagUK)
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