The UK construction sector is showing early signs of recovery, with a sharp rise in main contract awards providing fresh optimism for businesses across the industry.
The latest August 2026 Construction Review from Glenigan, covering the three months to the end of July, found that main contract awards increased by 17% compared with the previous three months. When compared with the same period in 2025, contract awards were up by an impressive 169%.
Construction Pipeline Shows Signs of Improvement
The rise in contract awards is being supported by activity across several areas of the construction industry, with major healthcare projects contributing to the increase. Schemes within the New Hospital Programme, including developments at Leighton Hospital and Frimley Park Hospital, have reached the contract awarded stage.
Detailed planning approvals also provided encouraging signs, increasing by 10% compared with the previous three months. Although approvals were 3% lower year on year, the latest figures suggest that the project pipeline is gradually beginning to strengthen.
The findings support Glenigan’s wider forecast for the sector, which predicts an 11% increase in construction activity during 2027.
Healthcare And Commercial Projects Support Growth
Healthcare has been one of the areas contributing to the stronger contract award figures, while Hotel and Leisure has also recorded substantial gains.
Activity across the public sector and civil engineering has accelerated, providing further opportunities for construction businesses and their supply chains.
The combination of new contract awards and stronger planning activity suggests that more projects are moving through the development pipeline, potentially creating greater opportunities for contractors as market conditions improve.
Project Starts Remain A Challenge
Despite the positive figures, the latest data also highlights that the recovery remains at an early stage.
Projects starting on site fell by 7% compared with the previous three months. However, starts were level with the same period in 2025, suggesting that the prolonged decline in activity may be beginning to stabilise.
Glenigan Economics Director Allan Wilen described the latest figures as encouraging, while highlighting that wider economic conditions, investor confidence and public sector spending will continue to influence the pace of recovery.
For the UK construction sector, the latest figures offer a more positive outlook following a challenging period. While project starts remain subdued, the substantial increase in contract awards and improving planning pipeline provide signs that activity could strengthen further as the industry moves towards 2027.
Source: BDC Magazine
Images: BDC Magazine