At a Glance
🏗️ Forecasts point to a return to growth in 2026, with UK construction starts expected to rise 10% after a subdued 2025.
💰 New orders rebounded sharply in late 2025, led by industrial and commercial work, while housing remains constrained by planning and affordability.
🚆 A £39bn pipeline of major projects, including the £10.2bn Lower Thames Crossing and multiple energy schemes, is set to drive infrastructure demand this year.
🏛️ Building Safety Act enforcement and new fire safety and levy rules begin to bite from February, raising compliance obligations for higher-risk schemes.
🌱 Sustainability, embodied carbon reporting and circular economy requirements are being hard-wired into contracts and planning policy, alongside rising tender prices.
Today’s update: sector data and pipeline analysis are converging around a cautiously positive 2026, but with cost inflation and regulatory tightening reshaping project risk. Major infrastructure and energy programmes are moving to centre stage just as building safety and sustainability rules intensify. Here’s what you need to know to stay ahead today.
Ongoing Stories
Following earlier coverage of the UK’s long-term construction pipeline, the latest market outlooks for 2026 add detail on a stronger recovery in industrial, commercial and infrastructure work, but confirm that housing is still being held back by planning delays and affordability pressures. (Sources: PBC Today, Construction Management)
Building on previous updates around planning and building safety reform, new guidance and enforcement activity under the Building Safety Act and Approved Document B from February 2026 clarify that higher-risk residential projects face more intensive oversight, levies and data-driven compliance requirements. (Source: ONS)
Returning to the theme of infrastructure-led growth, the latest project lists set out a £39bn 2026 programme anchored by the Lower Thames Crossing and grid, tunnel and hydrogen schemes, reinforcing earlier signals that infrastructure is outpacing other segments in the recovery.
Top 5 Headlines
🏗️ UK construction expected to rebound in 2026 after 2025 downturn
Industry forecasts suggest UK construction starts could increase by around 10% in 2026, with total output up 3.5–4.5% on 2025 levels. New orders surged in Q3 2025, rising 9.8% quarter-on-quarter and 29.3% year-on-year, driven by doubled industrial orders and a 51.4% jump in the commercial sector, although housing remains weak. The overall market is projected at about USD 325bn in 2026, rising to USD 391bn by 2031, implying steady medium-term growth underpinned by public investment. This matters because it points to a turning point in workload for contractors and consultants, but with a clear tilt away from traditional housing towards infrastructure and non-residential work. (Sources: PBC Today, Construction Management)
💰 Industrial and commercial work lead orders recovery as housing lags
Detailed analysis of 2025 data shows industrial construction orders more than doubled and commercial orders grew by over 50% year-on-year in Q3 2025. In contrast, residential activity is subdued, held back by planning constraints and stretched affordability for buyers and renters. The shift reflects capital moving towards logistics, manufacturing and offices while housing pipelines stall. For the supply chain, this rebalancing will shape bidding strategies, regional focus and capacity planning across 2026. (Source: Construction Management)
🚆 £39bn of major projects to anchor 2026 infrastructure workload
A combined Glenigan and Barbour ABI view of the top 100 UK projects highlights around £39bn of work scheduled for 2026, led by the £10.2bn Lower Thames Crossing. Other key schemes include London Power Tunnels Phase 2, ongoing HS2 civils and track works, the Humber Blue Hydrogen Facility, the Kincardine Grid Services Complex, Glenmuckloch Pumped Storage Hydro, the Thames Cable Tunnel and the £200m Paddington Triangle development. With government policies to streamline decarbonisation readiness and investment now in force, these schemes will be pivotal for contractors and investors targeting multi-year, large-scale programmes. (Sources: Glenigan, Barbour ABI)
🏛️ Building Safety Act enforcement ramps up from February 2026
New provisions under the Building Safety Act, supported by the Building Safety Regulator, begin to intensify oversight of higher-risk residential buildings from this month. This includes updated fire safety guidance in Approved Document B, the introduction of a Building Safety Levy and expanded use of digital data to monitor safety performance and enforce compliance. The shift will add programme and cost pressures to complex residential schemes and tall buildings, requiring earlier design certainty, more robust documentation and closer client–regulator engagement. (Source: ONS)
🌱 Sustainability and carbon rules harden across planning and contracts
Policy and regulatory updates indicate embodied carbon reductions, retrofit prioritisation in the National Planning Policy Framework and circular economy practices are moving from guidance into firmer expectations. Sustainability and carbon reporting are increasingly embedded in planning conditions and contractual requirements on new-build and refurbishment projects. For developers, designers and contractors, this will influence scheme viability, material choices and design solutions, as well as access to planning consent and finance. (Source: Pinsent Masons)
Also in the news
💰 Construction tender prices are forecast to rise by more than 5% in 2026, on top of building cost increases of around 15% over the past five years, tightening margins and challenging project viability. (Source: Pinsent Masons)
🏗️ The market remains heavily skewed to residential by value (about 38.1% of output), but infrastructure is expected to be the fastest-growing segment with a projected 7.9% CAGR to 2031. (Source: PBC Today)
🚆 Local and regional forums, including the recent Economy and Infrastructure Committee meeting in Dumfries and Galloway, are continuing to debate housing delivery, net zero and transport investment, although few immediate scheme-specific announcements have emerged. (Source: Local committee papers)
🏛️ Competition and sustainability regulation is evolving, with greater scrutiny of how projects demonstrate embodied carbon reductions, retrofit-first approaches and circularity in procurement and delivery. (Source: Pinsent Masons)
⚙️ The planned implementation of a Single Construction Regulator during 2026 is expected to consolidate oversight of building safety and product approvals, signalling a more unified but stricter regulatory regime. (Source: Pinsent Masons)
The Daily Build is written for people shaping the UK’s construction and infrastructure pipeline, from boardrooms to site offices. If today’s outlook and regulatory shifts affect your bids or business plan, consider forwarding this briefing to your team.