UK monthly construction output is estimated to have grown by 0.1% in July 2026, according to the latest data from the Office for National Statistics (ONS).
The increase follows a decrease of 0.1% in June 2026 and a decrease of 0.8% in May 2026. The increase in monthly output came solely from an increase in repair and maintenance, which grew by 0.8%, with new work falling by 0.4%. The largest contribution to the decrease in total new work was a fall of 4.9% in private housing new work.
In the three months to July 2026, total UK construction output is estimated to have fallen by 0.5%. This follows four consecutive increases in the three-monthly series with strong growth seen in the three months to April and May of 1.3% and 1.5%, respectively.
Over the three-month period, new work and repair and maintenance work fell by 0.4% and 0.7%, respectively.
Clive Docwra, managing director of McBains, said: “While the headline figure may show an increase in output in July, the fact that this came solely from repair and maintenance work reflects the challenging conditions impacting the industry. Particularly concerning is private housing new work falling by close to 5% in July, at a time when the government is talking up the housebuilding sector.
“The industry will also be worried that medium term growth is slowing down, with output falling by 0.5% over the three months to July, after four consecutive increases in quarterly returns. It’s clear that many construction firms are still feeling the impact of cost and inflationary pressures because of the Middle East crisis, and so the overall picture is one of treading water.
“On the domestic front, investors are still on their guard for clearer clues on what the Burnham government’s economic policy will resemble, and both they and the industry will be waiting until the October Budget speech to see if there are any measures to help stimulate investment in housing, commercial projects or infrastructure.”
Neil Leitch, managing director of development finance at Hampshire Trust Bank, added: “These figures are another reminder that housing ambition and housing delivery are two very different things. If we want a genuine reset in housebuilding, we must address the conditions that determine whether developers are prepared to commit capital and start building in the first place.
“Development has become progressively more complicated and more expensive. Developers can spend substantial sums getting a scheme through planning before factoring in Section 106, CIL, biodiversity net gain and the additional costs and requirements around building safety. Meanwhile, local planning authorities are being asked to administer an increasingly complex system while many remain significantly under-resourced.
“It is inevitable that against this backdrop SME developers are becoming more selective, concentrating their capital on sites where there is greater certainty around planning, costs and the route to delivery. These figures are the downstream consequence of decisions made months and sometimes years earlier. Government cannot continually add cost and complexity to the development process and then be surprised when fewer schemes make it onto site.”
Matthew Cook, managing partner at Goodman Jones, said: “The construction sector continues to face challenging trading conditions and it is no surprise that output levels remain subdued. More concerning at the current time is the data on the growing number of businesses showing signs of financial difficulties. When contract costs are increasing, margins are tight, borrowing costs remain high and projects are taking longer to complete, even relatively small issues can quickly become significant problems.
“In our experience, the businesses that are coping best are not necessarily those with the largest order books, but those with the clearest understanding of their financial position. Accurate and timely management information has become critical. Contractors need to be on top of contract profitability, cashflow forecasts and the accounting treatment of work in progress. Too often, we see businesses relying on outdated information or discovering issues on long-term projects far too late.”
Richard Cook, head of economics at Pegasus Group, added:“Today’s construction output statistics continues the wider trend of economic indicators bumping along the bottom. Whilst in a comparatively better position than some of its European neighbours, construction is such a big factor in the UK economy that today’s figures should prompt those in government to sit up and take notice.
“With the Autumn Budget on the horizon, the chancellor will need to deliver a clear and compelling speech in the Commons to restore essential confidence among businesses and investors. With the private sector accounting for around 80% of all jobs nationally, it is vital that the government provides clarity on how it plans to attract investment and give businesses the confidence that it is on their side.
“Construction is a fundamental pillar of the UK economy, but developers need to feel that it’s okay to make a profit. You can’t give a developer planning permission for a project in which they will make a multi-million-pound loss. As build costs continue to increase at a significant rate, that cost has to be passed on to the end user to make the numbers work, shrinking demand by exacerbating affordability, and that’s something we’d like the government to address.”
