April has brought a flurry of developments that will shape the UK construction sector well beyond spring. From big-picture government funding announcements to steel industry intervention and international trade turbulence, the sector continues to operate in a high-stakes environment. At Leading Edge, we’re tracking these changes closely to help our clients anticipate what’s coming next.
UK Spring Statement: Ambition vs. Immediate Impact
Chancellor Rachel Reeves’ Spring Statement included bold ambitions for housing and construction, with commitments to build 1.5 million homes during this Parliament and a £625 million fund to train 60,000 workers for the industry. An additional £2 billion was allocated to build more affordable housing.
While this was welcomed in principle, industry analysts were quick to point out that the budget offered little immediate support for construction manufacturers or suppliers already under pressure from price rises and high insolvency rates. The Office for Budget Responsibility’s projection of 305,000 new homes a year by the end of the forecast period is encouraging — but the delivery gap remains wide.
New US Trade Tariffs: Supply Chain Alert
Adding international pressure to the mix, the US has imposed fresh tariffs of 10% on most UK goods, and 25% on steel, aluminium, and cars — including goods relevant to the construction and building products sector.
Construction lawyers at Pinsent Masons warn that UK suppliers and contractors need to review how these changes could impact project costs, delivery times, and contract terms. Firms that rely on exporting to the US or sourcing specialist components from affected UK producers will be particularly exposed.
British Steel: Strategic Intervention
The government has moved to prevent a major supply crisis in the UK steel industry by enacting the Steel Industry (Special Measures) Act 2025, taking operational control of British Steel’s blast furnaces in Scunthorpe.
This emergency measure came in response to Chinese-owned Jingye Group announcing its intent to cease operations — a move that would have shut down the UK’s last remaining blast furnaces. The intervention has been broadly supported by the industry, which sees domestic steel capacity as essential for resilience and large-scale construction and infrastructure projects.
Sector Performance: A Fragile Rebound
According to the Office for National Statistics (ONS), construction output grew by 0.4% in February 2025 — the first monthly increase since late 2024. Growth came from both new work and repair and maintenance activity, although the rebound is still modest.
The UK Construction PMI from S&P Global painted a gloomier picture, remaining below the neutral 50 mark in March, suggesting that many contractors continue to experience falling workloads and squeezed margins.
Residential Starts Slide Again
The housing sector is still sluggish. The Construction Products Association has called out the lack of urgent policy changes to speed up planning and unlock development.
Meanwhile, Glenigan’s latest Index shows a 12% decline in private residential project starts over the past three months, and a 12% year-on-year fall. The figures suggest that developers remain cautious despite longer-term commitments in the Spring Statement.
Commercial and Infrastructure: Regional Pockets of Growth
Commercial and civil engineering project starts also fell — down 24% and 28% respectively, according to Glenigan. However, the North East bucked the trend, with a 6% rise in project starts in Q1 and a 17% year-on-year increase — highlighting the growing importance of regional development hubs.
Costs and Forecasts: More Pressure Ahead
Forecasts from the Department for Energy Security and Net Zero still point to a 1.1% fall in total construction output in 2024, followed by 3.5% growth in 2025 and 4.6% in 2026. However, new housing is expected to decline by 7.1% this year.
Cost pressures remain front of mind. According to BCIS, construction costs are forecast to rise by 12% by 2030, with labour and material costs driving most of the increase.
Final Thoughts from Leading Edge
This month’s developments reflect a sector still searching for stability. While long-term ambitions from government are welcome, delivery remains the challenge. Trade volatility, inflationary pressure, and regional disparity continue to shape short-term decision-making.
At Leading Edge, we work with manufacturers, suppliers, contractors and investors across the built environment to help them navigate uncertainty with confidence. Whether it’s understanding your market, testing demand for new products, or mapping the decision-making process among specifiers, our research helps you plan strategically — even in unpredictable conditions.
Talk to us about how we can help. Contact us.
Sources: ONS, S&P Global, CPA, Glenigan, DESNZ, BCIS, Pinsent Masons, PBC Today, Reuters, AP News
Written by the Leading Edge team – April 2025
