While the latest figures show the rate of inflation fell to 3% over the last year, construction in the UK is ‘struggling to move out of reverse', according to a new report from Glenigan's Construction Review.

Focusing on the three months to the end of January 2026, the review covers all major (>£100m) and underlying (<£100m) projects, along with all underlying figures (seasonally adjusted).

This month's review has shown a ‘general slowdown' in UK construction with a lack of confidence from private investors and a ‘persistently sluggish' economy continuing to suppress performance in the sector. This review saw a 31% decline in project starts compared to the preceding three months to the end of January, with values cut by a fifth (-20%) of 2025 figures.

Similarly, main contract awards dropped by nearly half (43%) compared to the previous year, with a decrease of 37% on the preceding three months.

Detailed planning approvals also fell by 30% during the review period, finishing a third down (-33%) from 2025.

Slow growth in demand and increasing production costs towards the tail end of 2025 seem to have taken their toll, leaving the industry struggling to ‘find a firm footing from which to relaunch', according to this most recent review.

Glenigan stated that the Q4 2025 UK growth figures ‘perfectly encapsulated' this downturn, as it showed a GDP increase of only a meagre 0.1%.

However, the company did note that the latest Chartered Institute of Procurement & Supply (CIPS) survey has recorded a ‘strengthening in service sector activity, stabilisation in manufacturing output and a gradual moderation in construction activity decline'.

On top of this the rate of inflation dropped to 3% in the year to January, down from 3.4% in December, according to the Office for National Statistics (ONS).

Glenigan's economic director, Allan Wilen, said: ‘Despite the disappointing numbers, there's definitely hope on the horizon. The latest CIPS figures should inspire some optimism across certain quarters of the construction sector, particularly those involved in public works. A handful of key schemes, including the Hospitals Programme, the Schools Building Programme and a strong pipeline of infrastructure and utilities upgrades are set to kick-start UK construction out of neutral.'

He added: ‘Of course an early interest rate cut would not only do wonders to restore dwindling consumer and business confidence, but also help get Britain building again.'