The UK construction sector is expected to rebound strongly from 2027 despite a difficult start to the year, according to Glenigan’s latest Construction Forecast.

The industry intelligence specialist predicts construction output will decline by 1% in 2026 before recovering by 11% in 2027 and a further 4% in 2028, representing overall growth of 13% compared with 2025 levels.

Allan Wilen, Economics Director at Glenigan, said: “It’s been a turbulent few months for the UK construction sector, with investors and developers reassessing and rescheduling planned projects. However, the economic outlook is expected to improve once the current fog of war dissipates, supporting a strengthening in construction activity from 2027 with an uplift across almost all private and public sector verticals.

“As our Forecast shows, there are some particularly exciting growth areas as Government funding is released and investor appetite starts to return to the market.”

Private and social housebuilding are both forecast to finish 2026 in negative territory, down 5% and 3% respectively. However, Glenigan expects private housing starts to rebound by 13% in 2027 and 5% in 2028, supported by lower borrowing costs, improved consumer confidence and planning reforms. Social housing output is forecast to increase by 8% in 2027 and 4% in 2028, aided by additional government funding and changes to rent caps.

The forecast also highlights strong prospects for offices, industrial developments and infrastructure projects, with increased investment in utilities, energy and transport expected to support activity.

The report suggests that while near-term conditions remain challenging, the outlook for the sector beyond 2026 remains broadly positive.