At a Glance:
UK construction output continued to contract in March, with the S&P Global PMI at 45.6 and housebuilding the weakest performer.
New orders fell at their fastest rate since November 2025, signalling further pressure on workloads into the second half of 2026.
The Government Major Projects Portfolio has been cut to around 80 priority schemes, reshaping where civil and infrastructure capacity will be needed most.
Renewables reached a record 52.7% share of UK electricity generation in early 2026, while gas and nuclear output declined.
Planning, building safety and environmental reforms continue to roll out, adding compliance complexity as costs and inflationary pressures rise.
Today’s update: official data confirm a deepening slowdown in UK construction activity just as government refocuses its major projects portfolio and the energy system tips further towards renewables. At the same time, a thickening web of planning, safety and sustainability measures is bedding in, reshaping risk and opportunity across the pipeline. Here’s what you need to know to stay ahead today.
Ongoing Stories
Returning to the theme of pipeline resilience, the latest S&P Global UK Construction PMI and market indexes show activity still shrinking, reinforcing earlier warnings that skills, investment and delivery capacity are under sustained pressure rather than facing a short-term shock. (Sources: S&P Global PMI, PBC Today)
Following recent coverage of planning reform and central intervention, implementation of the Planning and Infrastructure Act 2025 and associated NPPF proposals is now the main driver of change, with fee recovery, streamlined procedures and a brownfield-first stance set to reshape local decision-making. (Sources: UK Gov, Pinsent Masons)
Top 5 Headlines
⚙️ UK construction downturn deepens as PMI signals 15th month of contraction
The S&P Global UK Construction PMI registered 45.6 in March 2026, remaining below the 50 no-change threshold for the 15th consecutive month. Housebuilding was the worst-performing segment with its sub-index at 38.2, while civil engineering and commercial work also declined but at a more moderate pace. New orders fell at their fastest rate since November 2025, pointing to further weakness ahead. For contractors and the supply chain, the data underline a prolonged slump in workloads, sharper competition for viable projects and heightened risk of financial stress. (Source: S&P Global PMI)
⚙️ Project starts slide across sectors amid global conflict and cost spikes
Market indexes tracking project starts up to March 2026 report sharp declines across all major UK construction segments, with activity hit by geopolitical tensions, economic uncertainty and elevated financing costs. Building cost inflation remains significant, driven by supply chain disruption and fuel price spikes linked to Middle East conflict. This combination is delaying scheme starts, stretching contingencies and complicating bid pricing. For developers and contractors, higher input costs and volatile energy prices are making viability assessments and risk-sharing mechanisms more critical on new work. (Sources: Glenigan, PBC Today)
🚆 Government trims Major Projects Portfolio to c.80 priority schemes
From 1 April 2026 the Government Major Projects Portfolio has been refocused from over 200 schemes to around 80 “priority” projects aligned with the £718bn 10‑year infrastructure pipeline. The streamlined list spans roads, rail, energy and public service infrastructure and is intended to improve strategic delivery and oversight. For the market, this reshaping of the portfolio will influence where central government attention, capacity and funding are concentrated, with potential knock-on effects for supply chain planning and regional pipelines. (Sources: UK Gov News, Barbour ABI)
🌱 Renewables supply majority of UK power as gas and nuclear output fall
UK electricity statistics for early 2026 show renewables generation up 26%, taking a record 52.7% share of total output and lifting low-carbon sources to 64.4%. Over the same period nuclear generation fell 12% and gas-fired output dropped 16%, against a backdrop of volatile wholesale prices driven by geopolitical tensions. This strengthens the case for further investment in low-carbon generation and grid infrastructure, but also highlights exposure to commodity-driven price swings for energy-intensive construction operations. (Sources: UK Gov Energy Stats, Carbon Brief)
🌱 Solar PV investment strengthened by price floors and grid cost dynamics
Analysts report that solar PV remains one of the strongest clean energy investment propositions in 2026, supported by government-backed pricing floors that enhance revenue certainty. At the same time, rising grid upgrade costs are reshaping project economics and site selection, requiring more sophisticated grid-connection strategies. For landowners, developers and contractors, this creates a robust but increasingly technical pipeline of solar schemes where early-stage grid and regulatory due diligence will be decisive. (Source: WeSave)
Also in the news
🏛️ The Planning and Infrastructure Act 2025, now in force, enables councils to fully recover planning fees and streamlines consultation and committee stages, aiming to cut determination times on major schemes. (Source: UK Gov)
🏛️ The recent NPPF consultation proposes mandatory housing targets, a brownfield-first approach, selective “grey belt” Green Belt releases and stronger support for small and accessible housing schemes, with outcomes now awaited. (Source: Pinsent Masons)
🏛️ The Building Safety Regulator became an independent body on 27 January 2026, with early indications that approval times for high-rise residential projects are improving under the new regime. (Source: Shojin)
🏛️ A Building Safety Levy is due from October 2026 on new residential schemes of 10 or more dwellings, ringfenced to fund cladding remediation and adding a new cost line for developers. (Source: UK Gov)
🏛️ Legal and policy briefings flag more than 50 construction-related initiatives in safety, AI and environmental regulation expected through 2026, pointing to a significantly more complex compliance landscape. (Sources: Gowling WLG, PBC Today)
The Daily Build is written for people shaping the UK’s construction and infrastructure pipeline. If this briefing is useful, consider forwarding it to colleagues reviewing pipeline risk, bids or capex plans this week.
To stay aligned on fast-moving policy, cost and delivery trends, keep this update handy for your morning project and investment meetings.