Industry · · 7 min read
What is happening in the UK construction industry in 2026?
A difficult year for construction
Less work is coming through, housing is struggling and payment problems can leave even busy firms short of cash. If your next job feels less certain, the figures help explain why.
In August, the construction PMI, a survey of business activity, recorded its twentieth month below the level that signals growth. Housebuilding was particularly weak. Reuters, reporting S&P Global's survey
Here's what that means for people working in construction, using evidence available on 10 September 2026.
Busy now, less work booked ahead
Construction work carried out in Great Britain rose slightly, by 0.3%, in April to June compared with the previous quarter. But new orders fell by 11.8% over the same period. Office for National Statistics
These figures measure different things. You can still be finishing jobs agreed months ago while finding less work to replace them. That helps explain why a busy site and a worried contractor can tell different stories about the same industry.
For your own workload, what is booked after the current job matters as much as how busy you are today.
Housing needs buyers who can afford to go ahead
People need homes, but a housebuilder still needs buyers who can afford them. Homeowners also need enough money to commit to an extension or renovation.
The Construction Products Association (CPA) reports pressure from mortgage affordability and the cost of making projects stack up. It says basic home maintenance has continued while optional improvements have been weaker. CPA, summer forecast
The Bank of England also reported higher borrowing costs for households and businesses following the Middle East conflict. Bank of England, July minutes
For builders and trades, the consequence can be a job that stays at the quote stage because the client cannot make the numbers work.
Waiting to be paid
Payment problems add another pressure. The government's construction payment review identifies late and partly paid retentions, plus money lost when a firm further up the chain fails. Retentions are part of the payment held back under a contract. Government review
That can leave you waiting for money from work you've already done while the next job's bills arrive.
Late payments put the next job at risk
Wages, materials and plant still need paying. If money from the last job arrives late, a firm has to cover that gap while keeping the current job moving.
That's how being busy can still leave a business short of cash. A profitable job on paper only helps pay the bills once the money arrives.
There are plans to change retention rules. On 7 September, the government said the proposed ban would have a two-year transition and would need further legal steps before taking effect. The bill is still going through Parliament. The change won't put overdue money into contractors' accounts today. Ministerial answer; bill progress
Construction firms are still going under
3,841 construction companies entered insolvency in England and Wales in the year to July 2026. These are formal insolvency cases. The number was lower than in the previous year, but construction still had the largest total of any sector. Insolvency Service
When a firm fails, the impact can reach workers, subcontractors and suppliers: jobs interrupted, wages at risk and invoices left unpaid. A replacement contractor may also have to be found before work can continue.
The figures show the scale of the problem. They cannot tell us why each firm failed, and construction's size partly explains its large total.
Approval waits are shorter, but still matter
Some projects also have to wait for building-safety approval. The figures here concern higher-risk building work in England. Building Safety Regulator
For new higher-risk buildings and conversions, the regulator reported a median approval time of 22 weeks in the rolling period to the end of August, compared with 43 weeks a year earlier. Complex cases are tracked separately. Regulator's August update
That's an improvement, but it still leaves a substantial wait to allow for. The reported time is a guide to what happened, rather than a guaranteed start date for a particular job.
A skills shortage doesn't mean a job on every doorstep
A trade can be short of workers nationally while you struggle to find work locally. The jobs have to match your skills, experience and the distance you can travel.
CITB forecasts a need for around 206,000 extra workers between 2026 and 2030. That includes replacing people who leave construction, as well as meeting expected growth. It is a recruitment forecast covering several years, rather than a list of vacancies available now. CITB, workforce outlook
The useful question for you is which employers have work starting nearby and need the skills you have.
Will it get worse?
It could, particularly if you rely on housebuilding. The CPA's summer forecast expects construction work across 2026 to be 3.3% lower than in 2025. Its housing forecast is tougher: private housebuilding down 10%, and private home repair, maintenance and improvement down 8%. CPA
Those are forecasts for the amount of work across whole sectors. Your own workload could look very different. CITB predicts a much smaller overall decline, so the scale of any further downturn is uncertain. CITB
The risk for workers is a bigger gap between jobs. For firms, it's less work to bid for while bills keep coming.
When could it get better?
Both the CPA and CITB forecast a return to overall growth in 2027. That gives some reason for hope, but the timing depends on how conditions develop. CPA; CITB
Some work looks stronger already in the forecasts. The CPA expects infrastructure to grow by 3.2% in 2026, supported by energy and water investment. Whether that helps you depends on where the projects are and which trades they need. CPA
On site, “better” should mean something you can recognise: clients giving the go-ahead, jobs starting when promised, fewer gaps between contracts and payment arriving when it's due.
Those are the signs to look for. A forecast of growth becomes useful when it turns into work you can actually take on.
References
Sources checked on 10 September 2026.
- Office for National Statistics. Construction output and new orders, April to June 2026. Published 13 August 2026.
- Reuters. UK construction slides again, pulled down by weak housebuilding. Published 4 September 2026; reproduced by MarketScreener.
- Bank of England. July Monetary Policy Summary and Minutes. Published 30 July 2026.
- Department for Business and Trade. Late payments consultation: construction retentions. Original consultation published 30 July 2025.
- UK Parliament. Written answer on construction retention reform. Answered 7 September 2026.
- UK Parliament. Commercial Payments Bill: progress. Checked 10 September 2026.
- Insolvency Service. Company Insolvency Statistics, July 2026. Published 18 August 2026; section 2.4.
- Building Safety Regulator. June to August approval data, published 4 September 2026, and performance update.
- CITB and Oxford Economics. Construction Workforce Outlook 2026 to 2030. Webpage publication date not displayed.
- Construction Products Association. Summer 2026 forecast. Page dated 26 July, specifying release on 27 July.
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