The latest industry figures from analyst Barbour ABI paint a dismal picture for construction in May. Contract award value fell for the fourth month in a row, dipping 16% to £4.8bn, the lowest value since the same time last year.

 

Meanwhile, the value of new applications, an indicator of the pipeline for the rest of the year, fell to just £5.2bn in April, down 37%. This is the lowest since November 2025 and compares with £8.89bn in April last year.

 

“The latest figures will set alarm bells ringing in the industry, with activity significantly down on last year,” said Ed Griffiths, head of business and client analytics at Barbour ABI. “April’s sharp fall in applications set a weak pipeline for the months ahead, helping to explain May’s continued slowdown in overall activity.

 

“The decline was broad-based, with commercial, education and residential all dropping heavily after a strong Q1, pointing to reduced near-term project starts rather than just short-term volatility. To put it into context, the average monthly value in 2025 was almost double the April figure, at £10bn.”

 

Residential application value dipped 43% from a positive Q1 to £2bn, with no projects above £100m. The North West saw the largest fall in application value after a particularly positive March, with application value down 71% to £500m.

 

Looking at the awards picture, Griffiths continued: “May 2026 was a notably weak month for UK construction activity, with total awards values falling for a fourth consecutive month.

 

“Infrastructure plummeted 40% to a dismal £820m, the lowest value in recent records. This sharp contraction dragged on overall performance and is particularly significant given the sector’s usual role as a stabiliser. This reflects delays in large public schemes and continued scrutiny of capital spending. Weaker education and leisure activity suggests caution from public and private investors, likely due to tighter finance and continued materials and labour cost pressures.”

 

Residential activity dropped 7% to £1.7bn, indicating that housing momentum has cooled in Q2 under the pressure of higher borrowing costs and affordability constraints.

 

“These monthly movements sit within wider industry trends. Elevated borrowing costs, subdued investor confidence and planning bottlenecks continue to constrain project starts, while inflation still pressures viability.

 

“Government policy remains a key variable: commitments to infrastructure delivery, net zero investment, particularly energy-from-waste and grid upgrades, and healthcare estate renewal are supporting certain sectors, but fiscal constraints and project delays are dampening momentum elsewhere.

 

“Overall, May’s data reinforces the picture of a market lacking consistent growth drivers, with activity reliant on sporadic large projects rather than a broad-based recovery,” Concluded Griffiths.