Quarterly growth driven by infrastructure, but a sharp drop in new orders signals potential headwinds ahead
Total construction output in Great Britain grew by 0.3% in the second quarter of 2026 compared with the first quarter, according to figures published by the Office for National Statistics (ONS).
Both new work and repair and maintenance contributed to the rise, increasing by 0.4% and 0.2% respectively. Five of nine sectors expanded during the period, with infrastructure new work recording the largest gain at 1.9%.
Despite the quarterly increase, monthly output fell by 0.1% in June, following declines of 0.8% in May and 0.1% in April. The June decrease came entirely from a drop in new work, which fell 0.3%, while repair and maintenance was flat.
The latest ONS figures also showed that total construction new orders fell by 11.8%, equivalent to £1,232 million, in Q2 2026 compared with Q1 2026, driven primarily by declines in private commercial new work and public other new work. The annual rate of construction output price growth stood at 1.9% in the 12 months to June 2026.
Phil Hughes (pictured right), deputy managing director of SME lending at Paragon, said the quarterly rise should be viewed with caution. "While it's encouraging to see total construction and infrastructure output edge up over the last quarter, the decline in new orders is a reminder of the sector's fragility," he said.
Hughes added that many construction firms the lender works with remain willing to invest despite ongoing challenges, and that resilience built over years of economic and political disruption should not be underestimated. He, however, pointed out that finance alone is insufficient, calling for a stable policy environment and a planning system that supports faster development.
For Neil Leitch (pictured right), managing director of development finance at Hampshire Trust Bank, the data underlined how little conditions on the ground have shifted despite repeated rounds of government reform.
"There has been no shortage of initiatives, announcements and reforms, yet the conditions developers are working in have changed far more slowly than the policy surrounding them," Leitch said.
He cited a Savills report finding that housebuilding in England peaked when planning policy was stable following the introduction of the National Planning Policy Framework in 2012, arguing that uncertainty — rather than delay — is what stops viable schemes from proceeding.
"Demand for new homes is not the issue," Leitch said. "The challenge is creating the confidence and certainty that allow viable schemes to move from planning into delivery. Get the planning system right, get the resourcing right, and then leave it alone. Developers know how to build homes."
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