Construction’s 0.4% growth contributed to 0.6% growth in GDP overall in 1Q2026 – output in the services sector increased by 0.8% and by 0.2% in production(2).
Dr David Crosthwaite, chief economist at BCIS, said: ‘On the face of it, the latest ONS data release for quarterly construction output is broadly positive with 0.4% growth evident in total output in 1Q2026. However, the data reveal some concerning trends. While quarterly repair and maintenance output grew by 3.4%, driven primarily by private housing R&M, new work output declined by 1.9%.
‘New work output is important for the wider economy as it represents investment in fixed capital, which is a key lever for growth. Its decline brings the reality of a stagnant economy even closer.
‘It’s still difficult to say with any certainty whether poor new work output in 1Q2026 is a result of the Middle East conflict, although the decreases recorded across all sectors suggest it’s likely.
‘The government must tread carefully moving forward. Investment appetite for construction remains muted and the current political upheaval risks denting confidence further.’
On a monthly basis, data for March 2026 show construction output increased by 1.5% on February but decreased by 0.3% on the volume in March 2025.
In new work, the most significant monthly increases by sector were in private commercial (3.4%) and private housing (2.8%).