Political turbulence ‘sending shockwaves through the sector’

Residential construction starts fell sharply for the three months to the end of July, down 25% against the preceding three months and 46% compared with the previous year, according to the August 2026 edition of Glenigan’s Construction Index.

Private housing starts fell by a fifth (-21%) compared with the previous three months, and by half (-49%) compared to the same period last year.

Glenigan said that ongoing international conflict and political turbulence at home is still sending shockwaves throughout the sector, with plans being disrupted and private investors nervous about releasing investment.

Held back by external forces

Glenigan senior economist Yuliana Ivanykovych said: “Try as it might the sector continues to be held back by external factors beyond its control, with a changing of the guard at the top of Government being the latest in a string of extraordinary events. Key barometers such as residential construction remain depressed will little immediate signs of the dial moving before the end of the quarter.

“With the new Prime Minister keen on hard hats over academic caps, we might yet see some movement here ahead of Winter, so I imagine the whole industry will be keenly looking on to see what further policy announcements he makes over the next few weeks. However, to slightly temper this optimism, there remains a considerable degree of uncertainty across global markets. Tough economic conditions out of Andy Burnham’s control might dent those ambitions usually achievable in normal economic circumstances.”