Total UK construction output is estimated to have grown by 0.4% in Q1 2026 compared with Q4 last year, according to the latest figures from the Office for National Statistics (ONS).
Monthly construction output is estimated to have grown by 1.5% in March 2026, following an increase of 0.5% (revised from 1%) in February and an increase of 0.7%, (revised from 0.5%) in January.
The increase in monthly output in March 2026 came from increases in both new work and repair and maintenance, which grew by 2% and 0.8% respectively.
The annual rate of construction output price growth was 0.8% in the 12 months to March 2026.
Clive Docwra, managing director of property and construction consultancy McBains, said: “Following growth in February exceeding expectations, March’s return will give further heart to the industry. Overall growth of 1.5% in March is much better than expected given that these figures cover the first full month after the outbreak of the Iran war, while new work such as private housing increasing by 2.8% and commercial orders by 3.4% during the month are particularly pleasing.
“However, the sector will be sounding a note of caution as factors such as continued unpredictability in the Middle East and rising inflation will continue to have an impact in terms of sluggish demand over the coming months. The current uncertainty around the PMs position may also worry some investors in terms of whether a leadership change could result in policy shifts. Even the recent local election results could also have a bearing on projects going ahead – as witnessed by reports that the new local council in Enfield may shelve plans for the shortlisted new town. So while today’s figures are welcome, the bigger picture remains one of cautious optimism.”
Richard Cook, senior economics director at Pegasus Group, added: “We’ve now had a second month of rising construction outputs, which is a welcome sign that things may now be looking up for housebuilders after months of tough market conditions. While the headline figure is clearly a positive step in the right direction, it obscures underlying challenges that housebuilders must remain mindful of. The ongoing conflict in the Middle East is having a damaging effect on the UK economy which isn’t yet reflected in these figures. Economic forecaster ‘The ITEM Club’ has estimated the UK will lose 163,000 jobs this year, 32,500 of which will be in the construction sector – a substantial hit to a sector already struggling with skills shortages.
“However, for now, rising construction output is a good sign that the UK construction sector can return to health in the long-term. The NPPF remains a beacon of hope for the housebuilders looking to deliver UK growth. Businesses will be looking to the final guidance, which is expected this summer, on how the planning process can be streamlined to minimise friction. It is also very positive to see the government’s continued commitment to an ambitious target of 1.5 million new homes this parliament, despite prevailing headwinds. If we are to truly commit to economic growth, we must continue to be ambitious in our aspirations. While the economic climate remains challenging, the fundamentals are there to allow UK housebuilders to capitalise on sky-high political and public will to get building.”
