Activity in the construction sector picked up at the end of 2025, according to a new report, with analysts predicting that demand for data centres could drive a “structural shift” in the industry in 2026.
The value of project starts across all sectors increased by 7% in the fourth quarter of 2025 compared to the previous quarter, according to construction analytics firm Glenigan.
Although residential activity fell by 2%on the previous quarter, this was more than offset by project starts in non-residential construction, which increased 14%.
The value of office starts was up 11% in the three months to December, while starts for industrial projects rose 41% against the previous quarter. Glenigan’s index focuses on underlying projects with a total value of £100m or less. All figures are seasonally adjusted.
Allan Wilen, economics director at Glenigan, said the survey would allow contractors to “breathe a sigh of relief”.
“Contrary to expectation and speculation, the sector finished 2025 on a positive note, buoyed by significant Q.4 growth across non-residential verticals, particularly office and industrial where work has skyrocketed providing much needed momentum,” he said.
Wilen predicted that the strength of the non-residential sector would provide a further basis for strength in 2026.
Consultancy firm Linesight’s latest market report suggests that the biggest opportunity in the UK construction sector in 2026 would be in meeting demand for “mission critical sectors”, like data centres, life sciences, and sustainability.
Data centres in particular are placing “intense pressure” on UK delivery models, according to the firm.
Richard Joyce, managing director at Linesight Europe, said: “AI infrastructure, utility upgrades and sustainability requirements are simultaneously hitting the UK market and they’re redefining what gets built, how it is defined, and who is capable of delivering it.”
Read more here: Click Here
