Data from the Office for National Statistics (ONS) showed total output in July to September was lower than in April to June. New work fell by 1.6%, while repair and maintenance grew by 0.5%.

Five of the nine construction sectors recorded falls over the quarter. The biggest negative contribution came from private new housing, where output dropped by 4.7%.

Output grew by 0.8% in September alone, ending a run of four consecutive monthly decreases. The ONS also revised its figures for earlier months, putting the decline in August at 0.5% and in July at 0.2%.

Both parts of the sector contributed to the September rise. New work grew by 0.9% and repair and maintenance by 0.6%. Infrastructure new work, which rose by 3.3%, was the main driver of the increase in new work.

Total construction new orders grew by 1.2%, or £107 million, in the third quarter compared with the previous three months. The increase came mainly from public other new work and private commercial new work.

Construction output prices rose at an annual rate of 3.2% in the 12 months to September 2026.

Business leaders welcomed the September uptick but said it did little to change the wider picture.

Jo Streeten, managing director of Buildings & Places at AECOM, called the rise “an encouraging sign for a sector that has struggled to build momentum this year”. However, she warned that subdued economic growth and inflationary pressures were weighing on long-term investment decisions.

She said a credible pipeline of projects ready to go was needed for conditions to change, and noted that many were looking to the government’s 10-year plan. Reports that the plan might be delayed, she said, suggested “another winter that tests firms’ resilience and ability to retain capacity”.

Richard Cook, head of economics at Pegasus Group, described the figures as “another month, another sign of stalling progress for construction”. He said the Autumn Budget was a “steady-as-she-goes” one, and argued the sector now needed “more courageous, impactful change”. He pointed to development viability challenges, particularly in London, and said developers’ struggles stemmed not from a lack of available capital but from persistent political uncertainty and rapidly rising development costs.

Cook also called for action on skills shortages, saying there had been little progress in attracting more people into the sector. He said the Milburn Review of young people not in education, employment or training (NEETs), due this month, should deliver a solution that improves job opportunities for young people. He added that it was encouraging that construction remained on the government’s agenda.

Azfar Rizvi, commercial director for corporate and commercial lending at Aldermore, said the figures painted “a mixed picture for a sector still facing considerable pressures”.

He said SME housebuilders in particular faced lengthy planning processes, high material costs and borrowing pressures, which made it hard to commit to new projects while buyer demand remained uncertain. He welcomed the Budget’s support for first-time buyers but said supporting demand alone would not solve the housing shortage without action to help developers build.

Iain Wright, partner at specialist tax consultancy Claritas Tax, said output had fallen in each quarter this year. He described the 4.7% fall in private housing construction as “frankly alarming”, contrasting it with a 1.5% rise in repair and maintenance of private housing.

“The failures of our housing market can be summed up by those two statistics,” he said, arguing that people were repairing their homes but were reluctant or unable to move. He pointed to the planning system and the high cost of Stamp Duty Land Tax as key factors, and said there had been many recent calls for stamp duty on properties and shares to be abolished and replaced.