Glenigan is warning that UK construction is facing “dire straits” as the US-Iran war continues with the release of its May 2026 edition of its Construction Index.

The Index focuses on the three months to the end of April 2026, covering all underlying projects, with a total value of £100 million or less (unless otherwise indicated), with all figures seasonally adjusted.

Overall, the value of work starting on site in the three months to April fell by 9% and finished a fifth (-22%) below 2025 levels.

The report provides a detailed and comprehensive analysis of year-on-year construction data, giving built environment professionals a unique insight into sector performance over the last 12 months.

The May edition continues the general theme of sector-wide decline, as the US-Iran War drags on, disrupting international supply chains.

Whilst the fall is less severe than seen during previous months, Glenigan says there is a general fear that the industry is within the eye of the storm and that the results are a harbinger of potentially worse to come, as the supply chain disruption really hits home.

Aside from international turmoil, political in-fighting on the home front has led to policy stagnation and a lack of investor and consumer confidence means contractors and subcontractors are keeping their shovels clean until greater certainty returns.

Taking a closer look at individual sectors and verticals, the analysis say residential construction remains stuck in a downward spiral as buyers hesitate and demand continues to stagnate.

In the non-residential sector, a number of verticals saw substantial decline as the geopolitical turmoil started to really bite, disrupting vital supply chains, driving up costs and dampening confidence, inevitably leading to delays.

Civils work starting on-site down 42% and utilities down 56%

Glenigan’s data show this was most acutely seen within civils where work starting on-site crashed, tumbling 42% against the preceding three months and seeing performance slashed almost in half (-47%) compared to the previous year. Diving into the detail, Infrastructure work starting on-site fell 19% against the preceding three months and declined by 48% on last year. Utilities fared even worse, nosediving 56% against the preceding three months and by 46% against 2025 levels.

Construction markets "becalmed" and investors "reassessing" development plans

Commenting on the Index, Glenigan’s Economics Director, Allan Wilen said,

“Construction markets are becalmed. Faced with heighted geopolitical uncertainty generated by the Iran War, investors are reassessing their development plans. Whilst a rise in office, retail and health projects helped stabilise non-residential starts during the three months to April, both residential and civil engineering starts continued to decline. Parliament has now been prorogued and hopefully the King’s Speech, which comes after a successful State Visit to the United States, will provide an opportunity to reassess and reset the national direction.

“However, whatever the outcome of the coming weeks, there’s a general consensus that there will be fewer opportunities in the back half of this year, which also implies far fiercer competition. Savvy players will no doubt have strategies in place to capitalise on this risk and opportunity, and I’d urge those who are currently behind the curve to start seriously considering their own game plans and how they can stay afloat during an upcoming period of disruption. Niches, including data centres, purpose-built student accommodation and supermarkets, present pockets of growth and those than can either already service or diversify to meet requirements stand to weather the headwinds currently gathering force.”