A monthly snapshot of the UK construction industry covering contract awards, planning approvals, and applications by sector, featuring expert commentary and detailed data visualisations.
Commercial & Retail values decreased significantly from December’s spike, falling back to £910m, aligning more closely with mid‑2025 norms. The sector continues to show sporadic bursts driven by major office refurbishments, but underlying demand remains patchy.
Education saw an improvement to £470m in January after a weak December, though the longer‑term trend since mid‑2025 remains downward. This fluctuation likely reflects uneven approvals of capital programmes and delayed funding cycles.
The Hotel, Leisure & Sport sector fell to £300m in January, continuing the downward drift seen since Q4. This cooling is consistent with operators delaying new-build commitments amid continued cost inflation and pressure on leisure operator margins.
January saw a moderation in contract awards following December’s heightened activity, yet overall performance remained resilient given the ongoing economic uncertainty and anticipation around upcoming government policy decisions. Although the immediate pipeline has softened, planning activity suggests underlying confidence is holding, offering a more stable outlook than earlier in 2025.
Infrastructure continued to underpin the sector, with steady levels of major programme work offsetting declines in residential and commercial markets as developers navigate high financing costs and cautious investment conditions. While the start of the year is typically subdued, signals of easing inflation and improving credit availability may help rebuild momentum as 2026 progresses.
Despite pressures from rising labour costs and the broader economic environment, the sector enters the year on firmer ground, supported by continued government focus on infrastructure, energy security, and regeneration priorities.
Commercial & Retail saw the highest proportional increase, soaring 128% on last month to £2.6bn. The two largest value projects are the new Chinese Embassy and the Trident Way Data Centre, both are above £700m and are in London.
Hotel, Leisure & Sport approvals strengthened to £780m, more than doubling month‑on‑month. This continues the sector’s erratic but improving pattern, potentially linked to investment in refurbishment-led schemes and regional tourism infrastructure.
Residential approvals rose to £4.1bn, extending a steady upward trend from late 2025. The sector remains resilient, with January representing one of its strongest months in the past year.
Industrial approvals rose to £950m, recovering from a weaker Q4. Despite year‑to‑year fluctuations, the sector remains robust, supported by logistics, manufacturing upgrades, and distribution‑led activity.
London led the rebound with a jump to £3.2bn, driven by large office and residential developments.
Infrastructure jumped to £1.29bn, rebounding sharply from November and showing strong Q4 momentum. The wider 2025 trend remains elevated, supported by long‑term programmes and renewables‑driven schemes.
Medical & Healthcare rose dramatically to £1.61bn, a significant surge relative to typical monthly ranges. This appears driven by a small number of large‑value projects, consistent with periodic spikes seen earlier in the year.
Residential applications grew to £4.55bn, reversing November’s fall and returning the sector close to mid‑year levels. Activity remains broadly stable, although still below the early‑2025 peak.
London recovered to £2.34bn, following November’s sharp drop, driven by several high‑value Residential and Infrastructure schemes.
A monthly snapshot of the UK construction industry covering contract awards, planning approvals, and applications by sector, featuring expert commentary and detailed data visualizations.
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The Construction Industry Monthly Snapshot acts as a leading indicator of current and future activity in the construction industry. All values provided are at current prices, expressed in £bn unless stated otherwise and are non-seasonally adjusted.
The RSI is an index that measures current activity levels relative to
the last 5 years. It is presented on a scale of 0-100, where:
● 0 is no activity,
● 100 is the maximum possible activity, and
● 50 is the average level of activity.
The sectors that are included in the Construction Industry Monthly Snapshot are:
Our January edition of the snapshot features a review of the construction industry in 2024. This edition contains even more insight on the industry’s performance, including additional expert commentary, comprehensive data tables and concise visualisations.
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