Region well placed to take advantage when construction sector picks up, says Lancs expert
Lancashire's diverse geographic and sector make up means the region is well placed to benefit when the confidence finally returns to the construction sector, according to a leading industry adviser based in the county.
Joe Sullivan, partner at Preston-based accountancy and advisory firm MHA, the UK member of Baker Tilly International, reflected on the latest S&P Global UK Construction PMI data for June 2026. He believes opportunities remain for commercially astute contractors and developers, but more government action is needed to boost confidence and certainty.
The June data showed the UK construction sector remained under pressure, with the headline PMI rising slightly to 38.4 from May’s six-year low of 38.2. The figure remained well below the neutral 50.0 mark, indicating another sharp monthly decline in activity. Construction output has now decreased every month since January 2025, with June’s fall being the second-fastest since the start of the pandemic. Commercial construction proved the most resilient segment, though it still contracted, while housebuilding and civil engineering activity weakened sharply.
Despite these challenges, the data offered some grounds for cautious optimism. Business sentiment reached its highest level since March, with 38 per cent of firms expecting activity to increase over the next year, compared to 19 per cent anticipating a decline.
Sullivan, who advises property and construction firms across the region, said the figures reflected the difficult environment businesses are facing. He said higher financing costs, higher input costs, energy prices and labour costs are all feeding into decision-making. When you put all that together, it becomes a question of why would you start a project now, put your capital on the line, or make a big investment decision? Unless you really believe in the opportunity, you will probably delay a little bit.
However, Sullivan pointed to strong long-term fundamentals for construction and property, especially in the North West. He highlighted the region’s diverse mix of sectors and projects, which he believes will generate demand as confidence improves. The North West’s attractiveness in terms of transport, cost of living, diversity of opportunity, and amenities supports a broad mix of construction activity, including residential, industry, logistics, healthcare, life sciences, and defence.
Sullivan observed that contractors still have healthy pipelines of work, but project start dates are being deferred as clients seek greater clarity. While long-term demand remains, there is a short-term issue with confidence and certainty. Occupiers, investors, and developers need to feel more comfortable about the economic outlook and the certainty of returns before making decisions about project viability.
From a contracting perspective, many firms have substantial secured workloads extending into 2027, but start dates are shifting due to uncertainty around budgets and broader market conditions. While many firms are managing well in terms of secured work, there are concerns about keeping workforces fully occupied.
Sullivan suggested that the current environment could create opportunities for disciplined, well-managed, and commercially astute businesses. He said that firms with strong frameworks and repeat clients typically perform better in challenging conditions. He also noted that some competitors may struggle, allowing the most commercially astute firms to capitalise on emerging opportunities.