At a glance
UK construction output fell again in April with PMI stuck in contraction, even as forecasts point to infrastructure-led growth later in 2026.
Government’s 10‑Year Infrastructure Strategy and updated £718bn project pipeline remain the main policy anchors amid a lack of new announcements.
Energy transition projects gain momentum with grid and CfD reforms, while offshore wind and solar approvals reinforce a long-term renewables build-out.
Private housing and traditional commercial remain weak, but data centres, logistics and major regeneration schemes continue to shape regional pipelines.
Today’s update: latest market data confirms continued stress for contractors through spring 2026, set against an unprecedented, policy-backed pipeline in infrastructure and energy. The tension between immediate demand, skills shortages and longer-term programmes is sharpening choices for investors, clients and delivery teams. Here’s what you need to know to stay ahead today.
Ongoing Stories
Returning to the £530bn–£725bn national pipeline highlighted in recent editions, today’s data shows the April construction PMI at 39.7, signalling that near-term output is still falling even as forecasts point to 2.8%–4.5% growth in 2026 supported by major transport and energy schemes.
Following earlier coverage of skills pressures, today’s outlook quantifies the gap at around 266,000 workers, underlining that labour shortages remain a critical brake on delivering both the government’s 10‑Year Infrastructure Strategy and the updated £718bn pipeline.
Building on prior focus on energy transition infrastructure, new detail on grid connection and Contracts for Difference reforms reinforces that regulatory shifts are central to unlocking offshore wind, large-scale solar and EV charging investment this decade.
Top 5 Headlines
⚙️ Construction recession deepens despite 2026 growth forecasts
The UK construction PMI registered 39.7 in April 2026, indicating shrinking output across civil engineering, housing and commercial work, with 69% of firms reporting higher input costs – the fastest inflation since June 2022. Analysts still expect a return to growth of 2.8%–4.5% in 2026, hinging on an infrastructure‑led upturn. This matters because pricing pressure and weak current workloads will squeeze margins and solvency risk just as firms need capacity to meet the forecast rebound later in the year. (Source: S&P Global PMI; Pinsent Masons; Building)
🚆 £718bn infrastructure pipeline consolidates as 10‑Year Strategy bedded in
The government’s 10‑Year Infrastructure Strategy, first set in June 2025, continues to frame delivery of a £725bn investment programme, including a £9bn‑per‑year maintenance fund, £6bn of which is earmarked for hospitals. An updated national pipeline now lists 734 projects worth £718bn of public and private investment, with major schemes such as the Lower Thames Crossing, Heathrow expansion and large-scale hospital and school rebuilds. Returning today as the key policy backdrop, this consolidated pipeline gives the sector line of sight on workbanks but intensifies pressure to address planning, skills and contracting models. (Source: Gov.uk; projectdelivery.gov.uk; ICE Knowledge Hub)
🚆 Transport and digital schemes expected to drive late‑2026 recovery
Forecasters see infrastructure as the main growth engine from late 2026, led by milestones on HS2, progress on the Lower Thames Crossing, enhanced Network Rail investment under Control Period 7 and a surge in data centre development. This build-out is expected to compensate for weaker residential and office sectors, helping underpin the 2.8%–4.5% growth range. For contractors and consultants, positioning on rail, highways and digital infrastructure frameworks will be critical to offsetting current market softness. (Source: Pinsent Masons; Deloitte; BCIS)
🌱 Grid and CfD reforms reinforce UK renewables build-out
Grid connection reforms are advancing in 2026 to clear queue bottlenecks for renewable generation and new demand connections, while Contracts for Difference changes allocate £295m specifically to larger solar PV projects. In the 12 months to Q4 2025, the UK approved a record 9.9GW of offshore wind, and by January 2026 wind supplied 37% and zero‑carbon sources 61% of electricity. These shifts signal sustained demand for grid, port, marine and onshore balance‑of‑plant works, as well as planning and advisory services around energy consenting. (Source: Slaughter & May; RenewableUK; TechUK)
🌱 Policy tweaks tighten returns for generators but support system investment
Government plans to extend the Electricity Generator Levy from July 2026 and introduce a wholesale CfD mechanism for legacy generators in 2027, alongside Ofgem’s RIIO‑3 framework driving higher network investment now to stabilise bills later in the decade. New DfT guidance also simplifies street works permits for EV charging roll‑out. These measures collectively reshape revenue models for generators while reinforcing opportunities in grid reinforcement, EV infrastructure and flexible generation. (Source: Ofgem; Astute People; TechUK)
🏗️ Regeneration and BTR schemes keep regional pipelines moving
While no major new schemes were launched over 25–26 May, existing projects such as Bradford City Village (phase 1 due to start in 2026), the £1.9bn Smithfield Transformation, Bristol’s £4bn Brabazon development and Liverpool’s Lighthaus Tower and Central Park continue to shape local pipelines. Additional activity at Derby’s Infinity Park underscores ongoing demand for logistics and advanced manufacturing space. These schemes highlight where private capital and local authorities are still progressing large mixed-use, BTR and industrial projects despite wider market fragility. (Source: LandTech; Joseph Mews; LendInvest)
Also in the news
🏗️ Private housing demand remains fragile, with residential construction still contracting in April 2026, reinforcing downside risk for SME builders and housing-led regeneration pipelines. (Source: S&P Global PMI; Roofers Coffee Shop)
🏗️ Commercial construction shows a split picture, with subdued office development offset by strong growth in data centres and logistics facilities, shifting demand toward power‑hungry, edge‑of‑town sites. (Source: Deloitte)
🚆 Network Rail’s Control Period 7 continues to underpin a multi‑year rail investment programme, forming a core part of the expected infrastructure-led recovery. (Source: BCIS)
🌱 New guidance easing street works permits for EV charging aims to cut administrative friction for chargepoint roll‑out, benefiting civils contractors and utilities working in constrained urban environments. (Source: TechUK)
🏗️ UKREiiF in Leeds and recent London events remain key forums this month for investors, developers and local authorities to align on pipeline priorities and funding routes. (Source: LandTech; Farrer & Co)
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 preparing bids, investment cases or delivery strategies this week.