Growth momentum continues but developers warn conditions remain challenging
Construction output in Great Britain expanded by 1.6% in the three months to May 2026, extending a run of quarterly growth to three consecutive periods, according to the latest figures published by the Office for National Statistics (ONS).
Both new work and repair and maintenance contributed to the quarterly rise, increasing by 1.1% and 2.1% respectively. Seven of nine sectors recorded growth over the period, with non-housing repair and maintenance the strongest performer, up 3%.
On a monthly basis, however, output contracted by 0.8% in May, following a 0.1% fall in April and a 1.4% rise in March. The May decline was driven by a 2.1% drop in repair and maintenance, with private housing repair and maintenance falling 5%. New work edged up 0.2% over the same month.
Neil Leitch (pictured right), managing director of development finance at Hampshire Trust Bank, said the data reflected conditions already familiar to many in the sector.
"These figures reinforce what many developers are already experiencing on the ground," Leitch said. "Confidence remains difficult to establish, and the inconsistencies and complexities of the planning system are changing developer behaviour, with more time and capital being directed towards projects where planning risk is lower.
"As a result, schemes that might have progressed a few years ago are now being filtered out much earlier because developers are taking a far more disciplined view of what remains viable."
Leitch said that when speaking to developers, the conversation was rarely about demand, and that the real challenge lay in committing to long-term projects amid less predictable planning outcomes, greater pressure on viability, and reduced flexibility to absorb cost movements once schemes moved into delivery.
He added that renewed volatility in energy markets had introduced a further layer of uncertainty at a time when margins were already finely balanced.
On the change in government, Leitch acknowledged the opportunity but cautioned against optimism based on announcements alone. "The change in Downing Street is another opportunity to reset the conversation around housing delivery, though in truth we've seen no shortage of initiatives, announcements and reforms in recent years," he said. "The challenge has never been finding developers willing to build. It has been creating the conditions that allow viable schemes to move from planning into delivery."
He warned that current output figures reflected decisions taken months or years earlier, and that without greater developer confidence to bring viable schemes forward today, the industry would continue to fall short of the government's housing ambitions.
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